STOCKS | Goldman Sachs Says Semiconductor Stocks Are Oversold, Recommends Nvidia, Broadcom and AMD

Goldman Sachs says semiconductor stocks are clearly in oversold territory and recommends Nvidia, Broadcom and AMD as buy candidates. According to Sina Finance, analyst James Schneider said Nvidia and Broadcom trade at 12 and 13 times baseline earnings, respectively, even under the relatively unlikely scenario of zero growth in 2028, making their valuations attractive; he sees AMD's growth outlook favorably, though its valuation is less attractive. Technology stocks suffered steep losses in November. On November 5, as investors assessed the potential impact of an election “blue wave”—a Democratic landslide—on AI data-center construction, the S&P 500 fell sharply and the stock market lost $3 trillion in market value overnight. The Dow Jones Industrial Average plunged 1,800 points, its biggest one-day drop since 2020, while the Nasdaq fell 5.5%, weighed down by semiconductor and cloud companies including Micron and SanDisk. Markets weakened further, with semiconductors particularly subdued. The Philadelphia Semiconductor Index fell 21% over the past month, including a 6% decline in November. Schneider said the market is being shaped by two competing issues: how hyperscalers and AI model labs will fill the substantial funding gap between capital expenditures and free cash flow, and whether supplies of land, electricity and data-center infrastructure can meet consensus demand expectations for semiconductors. Since the U.S. election ended on November 3, uncertainty about the pace of data-center construction in Texas and other states has drawn greater attention. Schneider added that few catalysts are likely to lift share prices before year-end, but he believes the risk-reward profile of some stocks is attractive at current prices.