Chip makers have had a rough week.

Profit-Taking Amid High Valuations

After a significant rally earlier in the year, many investors opted to lock in gains amidst rising uncertainties. Semiconductor stocks had performed exceptionally well, driven by the boom in AI applications and a recovery in PC and smartphone markets. However, as valuations reached high levels, the temptation to take profits increased, contributing to the recent sell-off.

Geopolitical Concerns

The Biden Administration's potential new export controls to China have heightened fears about future sales. This is particularly impactful for companies like AMD, which have significant exposure to the Chinese market. Additionally, comments from former President Trump about Taiwan's dominance in chip manufacturing have further fueled concerns about the stability of the semiconductor supply chain, especially for companies with significant production in Taiwan​​.

But if you look at the chart above, you'll note one distinct underperformer of the bunch: AMD.

Here's how we see things moving forward...

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