NVIDIA Concept Stock Investment Guide: Which Tech Stocks Are Worth Watching in 2024?

NVIDIA Stock Performance Amid Market Shifts

Entering the second half of 2024, NVIDIA’s stock exhibits typical high volatility characteristics. In mid-June, the company’s market capitalization reached a peak of $3.34 trillion, briefly becoming the world’s largest company, surpassing Apple and Microsoft. However, the stock then experienced a significant pullback, with a decline of over 20% by the end of June, marking the worst monthly performance since September 2022, with nearly $800 billion in market value evaporated.

By the end of the third quarter, NVIDIA’s stock began to rebound. As of mid-October, the monthly increase reached 25%, with the stock climbing to around $134.80, just shy of the previous high of $135.58. This rally has driven a recovery across the entire tech supply chain, benefiting related upstream companies.

Core Logic of NVIDIA Concept Stocks

What are NVIDIA concept stocks? Since NVIDIA adopts a fabless model, focusing on chip design and technology development, actual manufacturing and packaging/testing are outsourced to third-party manufacturers. Taiwan’s tech industry has long operated in the semiconductor field, with a complete supply chain system, resulting in many Taiwanese companies linked to NVIDIA’s business.

These companies are classified as NVIDIA concept stocks mainly because their revenue and profits are directly tied to NVIDIA’s AI chip demand. NVIDIA leads the industry in artificial intelligence, deep learning, cloud computing, and autonomous driving, and the growth in demand for its products naturally drives the performance of related suppliers. As AI infrastructure construction accelerates, the entire industry chain’s companies have opportunities for both revenue and stock price growth.

Overview of NVIDIA Concept Stocks

Based on market value and business relevance, the representative NVIDIA concept stocks in Taiwan and the US are as follows:

Taiwan Stock Market Selections:

US Market Opportunities:

Including Arm Holdings, AMD, Qualcomm, Microsoft, Google, Amazon, Meta, and Apple—these tech giants all have synergistic effects with NVIDIA in AI software, cloud computing, or hardware domains.

Investment Potential of Taiwan NVIDIA Concept Stocks

TSMC: The Core Beneficiary of the AI Wave

As the world’s largest chip foundry, TSMC plays a crucial role among NVIDIA concept stocks. In September, revenue increased by 39% YoY, setting a new record of NT$251.87 billion. High-performance computing (HPC) accounted for 52% of revenue, surpassing mobile chips to become the company’s largest business. The company announced that its Kaohsiung plant will mass-produce the most advanced 2nm process by 2025, further strengthening its competitive edge.

Valuation-wise, the 2024 P/E ratio is about 28x, expected to decrease to 22x in 2025, which is relatively reasonable for a company with stable profit growth and market dominance. The continuous outperformance over the past 20 quarters demonstrates its operational efficiency.

Investment Advice: Short-term stock price is supported by the earnings call (scheduled for October 17), with Q4 revenue expected to grow in double digits. Technically, the 20-day moving average has crossed above the 60-day moving average, indicating a bullish pattern, but RSI has reached 67, approaching overbought territory. Continued monitoring is recommended; medium- to long-term holding offers significant value.

Sunlight Power: The Hidden Champion in the Packaging and Testing Market

As a leading global provider of semiconductor packaging and testing services, ASE has limited short-term stock price reaction but is actively expanding. Recently completed acquisitions of Infineon’s packaging/testing facilities in the Philippines and Korea strengthen its automotive and industrial segments. September revenue hit NT$55.58 billion, the highest in nearly 11 months.

Gross margin rose to 16.1% in the first half of 2024, still below NVIDIA’s advanced packaging/testing gross margins of 20-30%, but with AI business volume increasing, profit margins have significant room for growth.

Investment Advice: Short-term, multiple moving averages are in a chaotic crossover, indicating market uncertainty. It is advisable to wait for clearer technical signals before entering. Long-term, as the semiconductor recovery continues, growth prospects are promising.

GIGABYTE and KYEC: Mid-sized High-Growth Stocks

GIGABYTE’s subsidiary, GIGABYTE Steel, is a certified NVIDIA supplier, with server product sales increasing from 21% in 2023 to over 60% in the first half of 2024. Year-to-date, the stock has not moved (0%), indicating undervaluation.

KYEC holds over 50% of FPGA testing capacity and supports high-speed Ethernet testing platforms (GPU, FPGA, high-speed Ethernet are key components for AI computing). Capital expenditure in 2024 has been raised to NT$13.83 billion, with strong expectations for explosive growth.

Opportunities in US NVIDIA Concept Stocks

Arm Holdings’ Role Transformation

Although NVIDIA planned to acquire Arm for $40 billion but ultimately did not, Arm remains a key investment target, with holdings valued at about $147 million. Rumors suggest NVIDIA is preparing to launch chips combining next-generation Arm cores with Blackwell GPU architecture to target Windows on Arm.

Additionally, Arm is developing standalone PC GPUs in Israel, which could directly challenge NVIDIA’s position. Success would significantly enhance its competitiveness in the high-end market.

Investment Advice: Arm has adopted a new fee model, shifting from per-chip to per-device billing, increasing long-term revenue stability. YTD gains have exceeded 100%. While short-term caution is advised, long-term investment value remains.

How to Choose the Most Suitable Investment Method

Investors can choose among three paths:

Direct Stock Purchase — Best suited for those seeking long-term growth and dividends, but requiring larger capital and tolerance for company-specific volatility.

Exchange-Traded Funds (ETFs) — Suitable for diversification and risk reduction, but individual stock performance impact is diluted within the portfolio.

Contracts for Difference (CFDs) — Suitable for advanced traders seeking flexible trading and leverage, but with higher risk.

Important Reminders for Investment Decisions

The AI revolution is transforming the global economic landscape, and NVIDIA concept stocks have achieved remarkable results in recent years. However, many concept stocks have already experienced substantial gains, and whether their actual performance can keep pace with stock prices remains to be seen.

As NVIDIA expands its business, its supply chain is also evolving, and new entrants bring competitive pressures that should not be overlooked. Investors should maintain a dynamic perspective and stay updated on industry changes.

From a long-term perspective, AI market penetration is still in its early stages. Models like Sora for text-to-video applications indicate enormous future potential. NVIDIA’s GPU capacity is far from meeting market demand, and related concept stocks have solid fundamentals for growth. Continuous industry monitoring is essential to seize opportunities in this wave of technological advancement.