Nvidia’s Rebound Hides Tough Reality for Chipmakers
- Shares trade at a premium to peers even after 2022 selloff
- Analysts have slashed estimates for semiconductor earnings
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US semiconductor stocks have come roaring back over the past month, and the largest of them -- Nvidia Corp. -- has led the charge. Even some bulls on the company say the rally may not have much further to run.
Nvidia’s third-quarter results late Wednesday are likely to show that demand for electronics is still drying up, with analysts predicting an 18% drop in sales. Yet the stock, at 39 times estimated earnings, is still priced for a much better environment, at a time when the global economy appears to be heading for recession.