Semiconductor stocks especially the ones linked to artificial intelligence technology led by Nvidia Corp (NASDAQ:NVDA), Broadcom Inc (NASDAQ:AVGO), Advanced Micro Devices, Inc (NASDAQ:AMD), Arm Holdings plc (NASDAQ:ARM), Super Micro Computer, Inc (NASDAQ:SMCI) picked up after the U.S. Federal Reserve cut benchmark interest rate to spur growth.
The U.S. Federal Reserve decided to cut its benchmark interest rate by 50 basis points in a first since 2020, setting the interest rate at 4.75% and 5%. The cut is expected to boost discretionary spending by the companies.
The rate cut will be a welcome move, as semiconductor companies have invested heavily in Big Tech (including Microsoft Corp (NASDAQ: MSFT), Amazon.Com Inc (NASDAQ:AMZN), and Google parent Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL)) spending on their artificial intelligence ambitions, which entail substantial capital expenditures.
The semiconductor companies are also under pressure due to the U.S. sanctions on China, a crucial market. Therefore, U.S. investors and the semiconductor chiefs closely watch the agenda of the next President, expecting a softer stance on China.
As per a CNBC survey, Republican candidate Donald Trump appeared to be an investor favorite as the S&P 500 and Nasdaq noted significant upside during Trump's tenure as President.
However, the current Biden administration has started doling out semiconductor grants to the companies to consolidate its position.
Contract chipmaker Taiwan Semiconductor Manufacturing Co (NYSE:TSM), a crucial AI chip supplier for U.S. semiconductor companies, remains hugely invested in its Arizona fab construction to produce AI chips after bagging U.S. chip subsidies. It recently secured two smartphone chip deals from Google and Apple.
Price Actions: NVDA stock is up 3.16% at $116.95 premarket at last check Thursday. AMD is up 3.74% at $153.84, AVGO is up 3.45% at $167.25, SMCI is up 3.00% at $450.00, TSM is up 2.80% at $171.97, INTC is up 2.31% at $21.25, ARM is up 3.78% at $143.59.
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This article What's Going On With AI Related Stocks Nvidia, AMD, Broadcom And Super Micro On Thursday? originally appeared on Benzinga.com
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