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.
