Our indicative Theme of Internet Infrastructure Stocks – which includes a diverse set of companies that sell semiconductor products, networking equipment, and related products that underpin the Internet – is up by about 19% year-to-date, on an equally weighted basis, compared to the S&P 500 which has gained about 9% over the same period. The theme remains up by about 60% since the end of 2017, versus about 31% for the S&P. Nvidia (NASDAQ: NVDA), up 128% year-to-date, is the major driver of the theme’s return this year. On the other side, Intel (NASDAQ: INTC) and Micron Technology (NASDAQ: MU), in fact, are down roughly 15% this year.
Covid-19 is accelerating the trend of digitization, as people spend more time on the Internet to work, learn, shop, and entertain themselves. The growing requirement for connectivity and computing power could, in turn, drive demand for these companies that power the Internet. Here’s a quick rundown of some of the stocks and their performance over the past year.
Nvidia, a semiconductor company best known for its graphic processing units that are increasingly used in servers for machine learning and AI, is up 128% this year. The stock is up by about 4% over the last week. (related: Nvidia Stock Headed Toward $700?)
Lumentum Holdings Inc., a maker of optical fiber networking products is up by about 8% year to date. The stock was down by about 1% over the last week.
Cisco, a networking major that sells networking software, and products such as switches and routers, has seen its stock decline by about 10% year-to-date. The stock remained roughly flat last week. (related: Is The Sell-Off In Cisco Stock Justified?)
Intel, one of the largest producers of CPUs for servers has seen its stock drop by about -14% this year, due to delays with its next-generation 7-nm chips. The stock is up by about 2% over the last week.
Micron Technology, a memory manufacturer that sells DRAM and NAND memory has underperformed, with its stock declining by about -15% this year. The stock is up by about 4% over the last week.
What if you’re looking for a more balanced portfolio instead? Here’s a top-quality portfolio to outperform the market, with over 100% return since 2016, versus 55% for the S&P 500, Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk. It has outperformed the broader market year after year, consistently.
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