Is It Time to Sell Semiconductor Stocks?

It is important to guard against emotional reactions to short-term declines or increases in the stock market.

It is difficult to achieve successful investment by being afraid when stock prices temporarily fall or being happy when they rise slightly.

Rather than these short-term movements, it is important to continue investing with a long-term perspective.

In fact, even during periods of interest rate hikes, semiconductor companies tended to see significant stock price increases based on their performance.

Therefore, the most important factor determining the direction of semiconductor company stock prices is performance, and investment decisions should focus on performance trends.

The AI market is shifting from a training-centric model to an inference-centric one.

By 2030, inference is projected to account for 75% of the AI market, with training making up 25%.

This increasing proportion of the inference market signifies greater demand for semiconductors, which will lead to a continuous expansion of the overall market size.

Specifically, Goldman Sachs set SanDisk's target price at $2,200, analyzing that it's difficult to conclude the current level is a peak.

Considering these revenue growth trends, the semiconductor market still appears to have upside potential.

CPO (Co-Packaged Optics) technology is being adopted in environments that process vast amounts of data quickly, like data centers, to reduce power consumption and data latency.

The spread of this technology will increase not only the demand for optical engines but also for related semiconductors.

The CPO market is projected to grow at a high compound annual growth rate of 230% from 2025 to 2031.

This figure represents a 53.3% growth year-over-year.

The continuous increase in revenue indicates that semiconductor demand remains strong, and the market is not slowing down.

Oracle recently announced outstanding results, surpassing predictions.

Revenue reached $19.3 billion, exceeding the forecast of $19.14 billion, and EPS also surpassed expectations at $1.92 compared to $1.74.

Furthermore, remaining performance obligations (RPO) reached $66.4 billion, and the 2025 revenue and EPS guidance were positive, indicating sustained robust growth.

Of this, cloud infrastructure revenue was $7.4 billion, and application revenue was $4.2 billion.

Software segment revenue decreased slightly, but hardware and services segments showed growth.

This aggressive infrastructure investment is currently resulting in negative free cash flow.

However, this is interpreted as an essential investment process for building AI infrastructure and generating profits in the long term.

Oracle's remaining performance obligations (RPO) have surged about 7-fold from approximately $99 billion in August 2024 to $664 billion currently.

This explosive growth in RPO suggests that half of the RPO is expected to convert to revenue within the next 36 months.

Particularly, AI demand for OCI (Oracle Cloud Infrastructure) is acting as a core driver of this growth, strongly demonstrating the potential of the AI market.

The semiconductor index is showing increased volatility, forming a symmetrical triangle pattern with lower highs and higher lows.

This symmetrical triangle suggests a breakout in either an upward or downward direction, but a decision may take some time.

After being influenced by macroeconomic factors in September, an earnings-driven market based on corporate performance is expected to unfold from October, and the trend for major stocks like Micron is still valid.

Currently, semiconductor stock prices have entered a phase of increased volatility.

While short-term ups and downs in stock prices may become more pronounced, this is not a shift towards a sharp decline.

Therefore, rather than selling out of fear of a stock price drop, it is time to maintain a holding perspective and observe market trends.

This can be seen as a temporary adjustment due to external variables, and the trend itself has not broken.

DRAM-related stocks are maintaining an upward trend through trend changes.

Although some short-term adjustments or pullbacks are appearing due to failed breakouts at highs, this cannot be seen as a trend-based decline.

This is because robust revenue continues to support stock prices and defend against further declines.

Current stock prices are showing a converging market with lower highs and higher lows.

However, since earnings per share (EPS) and revenue are continuously increasing, there is insufficient reason to sell merely because the trend has broken.

AMD is currently maintaining a very strong trend in the market.

Stock prices are undergoing an adjustment, showing a sideways movement after an increase.

This sideways consolidation period can be interpreted as preparation for a future N-shaped ascent and is not a phase of sharp decline.

Marvell Technology is in a symmetrical triangle pattern with lower highs and higher lows.

Ultimately, stock prices move according to revenue and profit, so if a company's EPS (earnings per share) doubles, investors should hold on patiently.

It is important to continuously monitor corporate profitability and maintain a long-term investment perspective.

SK Hynix's market is not yet over; it is undergoing a short-term adjustment within an upward trend.

Samsung Electronics also shows high volatility in a sideways market, but the momentum for stock price increase has not completely dissipated.

Neither company has entered a sharp decline, so it is necessary to monitor market conditions and respond accordingly.