Posted November 12, 2021
By Greg Guenthner
The Most Wonderful Time of the Year?
“The global chip shortage continues to ravage supply chains all over the world,” says our chief technology analyst Ray Blanco. “Advanced electronics manufactures are having trouble keeping up with demand. And I suspect that problem will only worsen as we settle into the holiday season.
“Consumer electronics manufacturers, carmakers, and even home appliances companies are all feeling the pressure of the chip shortage,” he says, “and are having trouble meeting production targets and earnings estimates.
“In fact, many big-name automakers have had downright disappointing earnings results since the chip shortage started to affect supply chains.
“There are plenty of other companies that stand to suffer until this shortage can resolve,” Ray says. “On the flip side, some of the premier names in the semiconductor industry have been surging as a result of price premiums and shortened supply…
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Your Rundown for Friday, November 12, 2021...
“Companies including NVIDIA Corporation (NASDAQ: NVDA) and Advanced Micro Devices, Inc. (NASDAQ: AMD) have seen incredible performance…
Just glancing at the chart, since the pandemic went global in March 2020, both semiconductor stocks are up over 300% and 200% respectively. This “while the world works to get itself out of this bottleneck,” Ray notes.
“So how does this translate to the rest of the market?
“For starters, there are a handful of chipmakers pledging to put more investment into production to keep up with the growing demand,” says Ray. Because “the chip shortage isn’t going away anytime soon.
“Experts estimate that we might not be out of this bottleneck until 2023,” says Ray, “potentially even later, so it becomes a toss-up on when this might end. So,” he concludes, “it’s important to pivot and make this unfortunate situation work in your favor.”
[Editorial note: Back to Nvidia Corp, Ray first recommended the semiconductor stock to his subscribers on Oct. 5, 2011… when it was trading at $12.61. Today? NVDA trades around $300 per share.
“We sold for a 50% gain in 2014,” Ray recounts, “then jumped in again at near the same price in 2015… That's when it really started to run!” Indeed. If investors held on to shares they bought six years ago, they would have a 6,000% ROI today.
Most recently, Ray’s identified a contingency of small chipmakers that are poised to be the next premier semiconductor stocks, and for your benefit, he’s recorded a timely video briefing. But because the chip-shortage crisis is a fast-moving situation, we urge you to watch today.
Market Rundown for Friday, Nov. 12, 2021
The S&P 500 is up 4 points to 4,650.
Oil’s down almost 1% to $80.84 for a barrel of WTI.
Gold’s lost $3.80 per ounce to $1,860.10.
And Bitcoin is down about 2% to $63,700.
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We hope you have a wonderful weekend. We’ll be back Monday!
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