I/O Fund in the Media: Semiconductor Stocks, CHIPS Act, and Why We are Bullish on Bitcoin
July 19, 2022
Lead Tech Analyst Beth Kindig joins Charles Payne of Fox Business news to discuss the $52B CHIPS Act, FABS Act, opportunities in tech that may be overlooked, and why I/O Fund is bullish on Bitcoin right now.
CHIPS Act - What Semiconductor Stocks Will Benefit The Most?
While it’s a big week for tech earnings, we’re also keeping an eye on activity on Capitol Hill as we wait for a decision on the CHIPS Act which could bring $52B in subsidies and investment tax credits to boost US manufacturing. Beth and Charles discuss the question on every investor's mind: “Who can benefit from this?”
“The CHIPS Act as it’s written will only benefit manufacturers,” Beth says. “Those manufacturers that only focus on design aren’t happy about this - rightfully so - because, again, it’s slanted in favor of manufacturers.” Beth goes on to explain the FABS Act which offers a manufacturing credit and a credit for chip design activities and that, according to the bigger chip companies, is more fair.
Ultimately this is a positive thing. We could potentially bring chip manufacturing over to American soil. Chips are becoming the way forward in tech, so outsourcing the manufacturing where another country controls has become a source of tension. With that said, ideally it would be more evenly split between manufacturers and design activities, as the goal is to make sure the government doesn’t get in the way of innovation by weakening our strongest design companies.
As the Acts are written and if they’re passed, they stand to benefit Intel, Micron, Texas Instruments and Lam Research – which are all FABS on American soil. As Charles points out, it also will help Applied Materials in the long run.
Opportunities in Tech that may be Overlooked
Every time there’s a bump in the market we see the mega-cap names that do pretty well. Charles asks Beth about the second-tier, non-profitable tech names that seem to be doing well, but are potentially being overlooked.
“What we saw is there were a couple of cloud stocks and cybersecurity stocks that bottomed in May,” Beth explains. “That means as the broader market made a new low, these companies did not make a new low. From the FAANGs - Google was the one that didn’t make a new low, that’s always very encouraging to see.”
Beth’s Favorite Name in Tech Right Now
Bitcoin - Despite crypto being out of favor, we’ve been buying in the crypto space lately. The way we will know if Bitcoin is in a larger uptrend (bulls in control) is the price has to stay above $14,000 to $15,000. This is a line in the sand. Due to sentiment, we could see one more minor pullback, and if this pullback holds the $19,000 region, then that’s a strong buy signal.
“Fundamentally, Bitcoin is in a much better position than when it traded around this price previously,” Beth stated. She notes that Bitcoin wallets have gone exponentially up, and companies such as Tesla, Square and others hold it on their balance sheets – meaning Bitcoin is certainly fundamentally stronger today.
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