How Much Upside Is Too Much for Intel, AMD and Nvidia?

Many investors prefer to invest in the fourth quarter of a given year because there is so much that can happen late into the year. Companies and governments tend to spend their money and make plans for the coming year. With news that the ongoing China trade war is about to get a phase one passage, at least some fears about the national and international technology leadership will be hurt in 2020 have started to give way as the Dow Jones industrials, S&P 500 and the tech-heavy Nasdaq have all been putting in new all-time highs.

While much of the gains in the stock market in 2019 look extreme, one could argue that the moves may be artificial since January of 2019 started off of such a negative fourth quarter that was worse than many investors have seen. At this point, many stocks are up huge in 2019, and they are up big even versus right before the tremendous selling pressure that was rattling the markets in late in 2018.

It is fair to ask just how much credit that the makers of the brains behind the world’s top devices should really be worth. Hardware makers sometimes are not valued as much as other areas in technology, but the brains behind the future of technology go way beyond laptops, smartphones and desktops. Up for grabs in the years ahead is endless business from data center orders for processors and chipsets. Ditto for artificial intelligence (AI), virtual reality, augmented reality, driverless cars and trucks, smart devices, connected homes and offices, and everything that makes up the Internet of Things.

The question to ask is whether some of the major technology companies have seen their shares run too much, and whether it’s fair to expect a further run higher in 2020.

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