Investors are rotating into relatively undervalued chip design and manufacturing companies this week. $Intel(INTC)$ soared 10%, $ON Semiconductor(ON)$ rose 7.3% while $STMicro(STM)$, $Microchip(MCHP)$ gained more than 6% as of Tuesday this week, strongly outperformed $Nvidia(NVDA)$’s 1.58% weekly gain.
NVDA trades at a forward P/E of 33.45, significantly higher than peers like QCOM (13.52), MU (16.32). NVDA's P/S ratio of 23.65 far exceeds QCOM (4.15), MU (4.07), and AMD (7.20), suggesting profit-taking in high-growth stocks amid concerns about stretched valuations.
Investors are closely monitoring developments in trade policy, viewing any reduction in export barriers as a major catalyst for sustained growth in chip stocks, which remain central to the AI revolution and digital infrastructure expansion.
As investors rotate into undervalued chipmakers, option strategies like bull call spreads offer targeted upside in names like Intel and TSMC. With valuation concerns pressuring Nvidia, tactical positioning in second-tier stocks is gaining traction amid a broad semiconductor rally fueled by AI and trade policy catalysts.
Intel: Powerful Implications for Mobile Lineup
$Intel Corporation(INTC)$ enjoyed a powerful rally on Wednesday, with shares rising nearly 8% during the session. The rally reflects heightened optimism around the company’s new strategic direction and leadership under recently appointed CEO Lip-Bu Tan.
Benchmark Surprise: Core 9 270H Outpaces Core i5 by Nearly 14%
According to PassMark benchmark results, Intel’s newly revealed Core 9 270H outperformed the Core i5 14500HX by an impressive 13.98%. This jump in performance appears to stem largely from gains in single-threaded workloads — a category where Intel has recently been under pressure to improve.
The Core 9 270H nudges ahead in raw base clock, running at 2.7 GHz versus the i5’s 2.6 GHz. More significantly, the boost clock ceiling is far higher. While the Core i5 14500HX maxes out at 4.9 GHz, the Core 9 270H can reach 5.8 GHz under optimal conditions — a substantial increase that gives it an edge in demanding workloads.
This benchmark win suggests Intel is refining its mobile CPU game with better thermal headroom and clock efficiency. The high single-threaded output also points to architectural enhancements that could give Intel renewed competitiveness against AMD and Apple in high-performance portable devices.
If sustained in broader testing, this could mark a pivotal step in Intel’s push to reassert dominance in the mobile CPU market — not just on specs, but where it matters most: real-world performance.
Strategic Overhaul Underway
At the heart of the current optimism is Intel’s corporate restructuring. Under Lip-Bu Tan’s leadership, the company is actively reshaping its business model to better focus on core strengths. Part of this involves exploring the sale of its networking and edge businesses—previously under the NEX division but later consolidated—as part of a broader effort to simplify operations and refocus investments on key growth areas such as foundry services and AI-related infrastructure.
Option Strategy: Bull Call Spread
Objective: Capitalize on continued upside while limiting cost.
Structure:
Buy 22.00 Call (Jun 20) @ $0.83
Sell 23.00 Call (Jun 20) @ $0.48
Max Profit: $65 (if INTC > $23 at expiry).
Breakeven: $22.35.
TSMC’s May Sales Surge 39.6% on Resilient AI Demand
$Taiwan Semiconductor Manufacturing Co.(TSM)$, the main chipmaker for Nvidia Corp. and Apple Inc., reported a 39.6% jump in May revenue after companies stockpiled chips in response to mounting trade uncertainty. TSMC shares jumped 2.6% on Thursday.
The Hsinchu, Taiwan-based company’s revenue reached NT$320.5 billion ($10.7 billion). That compares with a 48% gain during April. Analysts on average expect a 39% increase in TSMC’s second-quarter sales. While sales in May appeared to be relatively healthy, they dropped 8.3% from April.
TSMC Chief Executive Officer C.C. Wei last week reaffirmed the company’s guidance for sales to grow in the mid-20% range in US dollar terms in 2025. AI chip demand still outstrips supply, he told shareholders.
Bull Call Spread (Upside Capture)
Structure:
Buy 215 CALL ($6.71 premium)
Sell 230 CALL ($2.15 premium)
Rationale:
Targets TSMC's proximity to resistance at $212.55 and analyst mean target ($218.45).
Max Profit: $10.35 (if TSMC ≥ $230 at expiry).
Breakeven: $221.36.
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