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Smartphone Stocks: A shift to chips

by Keith Erickson For Coeur Voice
| October 16, 2018 12:52 PM

While smartphones continue to be a mostly secure venture for those who invest in the stock market, an emerging buying trend for investors is not the actual phones, but the versatile microchips inside.

Used in electronic devices ranging from computers, to cell phones to gaming, the market for those tiny silicon semiconductors is booming, according to Investor’s Business Daily (IBD), a national publication that covers the stock market, finance and economics.

That growth—albeit volatile at times—in computer memory products has helped fuel tech firms like Boise-based memory maker Micron’s revenue and profitability. One might even call Micron’s growth explosive. For context, Micron made $20.3 billion in revenue during fiscal 2017, up 64 percent from the levels it saw during fiscal 2016.

Local finance professionals agree that investing in chip technology is a solid and rapidly growing option for building financial portfolios.

“I’ve seen a definite uptick in the chips,” said Michael Armon, financial planner for the local office of Stifel Financial Corp., in Coeur d’Alene.

“A big reason is the ability for use outside of just smartphones. You’re seeing them for gaming like esports (a popular form of competition using video games), in super computers and there are some applications for cars these days,” he said. “Chips are kind of leading the way in technology investing.”

Armon said the biggest growth in the chip market comes from firms like Nvidia and Advance Micro Devices (AMD), both of which manufacture semiconductors. Nvidia designs chips for gaming, mobile computing and automotive market, while AMD develops computer processors and related technologies for business and consumer markets.

Year-to-date in 2018, Nvidia has seen its shares rise 38 percent while AMD has experienced a 271 percent market share increase, Armon said.

While those trends are expected to continue, Armon said firms like Nividia and AMD will continue to lag behind industry giant Apple.

“Apple just went over $1 trillion in market cap, so obviously they’re leading the way for smartphones in the U.S.” Armon said. Indeed, the iPhone maker this past August became the first publicly traded U.S. company to reach the trillion mark.

“They’re still going crazy … year-to-date their up 31 percent,” Armon said. And while tech stocks have slowed somewhat from the “astronomical” rate experienced earlier this decade, it’s still a growing market sector.

As investors continue to climb aboard the tech trading train, a growing number of options are available to streamline investment practices from the palm of your hand as consumers are increasingly shifting towards mobile platforms to help gain market insight.

According to Investopedia, a website that focuses on investing and finance education and analysis, here are the top four apps growing in popularity and positive reviews among users:

Robinhood

While more experienced traders may be skeptical about the simplicity of the app and the newbies it attracts, there is no denying that Robinhood is a game changer. Launched in 2014, the firm’s target audience is the younger generation of traders with an average age of 26 years old, 25 percent of whom are first-time investors.

TD Ameritrade Mobile

TD Ameritrade Mobile offers customers several applications for monitoring the market and making trades. TD Ameritrade Mobile Trader enables the trading of equities, options and futures.

E*Trade Mobile

E*Trade Mobile’s easy-to-use interface helps users locate stocks quickly through a voice search function. Similar to TD Ameritrade applications, E*Trade Mobile provides an opportunity to trade a variety of securities: stocks, ETFs, mutual funds and options.

TradeHero

TradeHero is a learning app that allows investors to practice trading in a safe environment. Based on the real world data, the app is perfect for users looking to hone their skills or test new strategies without financial risk on simulated stock exchanges from around the world.

In the ever-changing and rapidly growing tech industry, Armon foresees a strong future with huge potential for investors.

“I think we’re in a space and time now, with technology continuing to grow, that the tech leaders and trendsetters will continue to be a good option for investors,” he said.