- CJ Muse from Cantor Fitzgerald sees the recent semiconductor dip, including Nvidia’s (NVDA) double-digit drop, as a buying opportunity, noting Nvidia’s attractive valuation at 16 times next year’s earnings amid strong AI demand.
- Muse highlights TSMC’s commitment to 200,000 wafer starts in the U.S. over three-plus years, driven by a 25% ITC tax credit, though he believes Trump’s administration favors tariffs.
- He suggests the U.S. needs more investment beyond TSMC’s 100,000 additional wafer starts, proposing that fabless firms like Qualcomm (QCOM), Broadcom (AVGO), and Nvidia could help Intel (INTC), rather than relying solely on government funding.
CJ Muse, an analyst from Cantor Fitzgerald, appeared on CNBC’s ‘Squawk on the Street’ to weigh in on the semiconductor industry amid a volatile period where the group has declined year-to-date and stocks like Nvidia (NVDA) have dropped double digits. He sees this as a buying opportunity, particularly for Nvidia, which he notes is now trading at 16 times next year’s earnings—a valuation he considers too attractive to pass up. Muse argues that despite a “perfect storm” of market concerns like slowing GDP, tariff uncertainty, and Nvidia’s guidance merely meeting buy-side expectations, the long-term outlook for AI remains robust, making it a moment to “be greedy” rather than cautious. Nvidia’s stock, even after its in-line guidance, reflects a dip that Muse believes overstates the risks, given AI’s ongoing momentum in driving chip demand.
The discussion also turned to President Trump’s recent comments dismissing the Chips Act, raising questions about its impact on beneficiaries and unspent funds. Muse acknowledges the nuance here, crediting the previous administration for luring TSMC to commit to 100,000 wafer starts in the U.S.—a figure that TSMC recently doubled to 200,000 over the next three-plus years. He contextualizes this by noting Apple’s 60,000 wafer starts per month, underscoring that 200,000 is a significant step toward advanced manufacturing on U.S. soil. However, Muse suggests Trump’s approach leans less on subsidies and more on tariffs and incentives like the 25% ITC tax credit, which initially drew TSMC stateside. He believes the administration wants to avoid heavy-handed government funding or DEI-linked requirements, instead pushing for industry giants like Qualcomm (QCOM), Broadcom (AVGO), and Nvidia to bolster domestic efforts—particularly for a struggling Intel (INTC), which needs support to remain a leading-edge player.
Muse remains optimistic about semiconductors in the U.S., emphasizing that bringing the industry home is a shared goal across administrations, even if strategies differ. The additional 100,000 wafer starts from TSMC signal progress, but he stresses more is needed to secure a full ecosystem. Intel’s role is pivotal, and Muse speculates that rather than direct subsidies, the government might encourage partnerships with fabless chip designers to prop it up. Amid market jitters over GDP and tariffs, Muse’s take is clear: the dip in stocks like Nvidia, now at 16 times earnings, is a chance to buy into a sector still poised for growth, while policy shifts aim to reshape how chipmaking takes root in America. The timeline is underway with TSMC’s plans, but the bigger question is how Intel and others scale up to meet the moment.
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