On Sept. 12, Anthropic CEO Dario Amodei published an essay called “We Must Pace the Frontier” – warning the whole AI industry to slow down.
His fear was recursive self‑improvement: AI models building smarter AI models faster than our ability to keep up with them.
And the heads of OpenAI, xAI, and Google’s DeepMind said they agreed.
Wall Street took that as a reason to sell chip stocks. The Monday after Amodei made his warnings, the VanEck Semiconductor ETF (SMH) dropped 4.8%.
Semiconductors are considered the beating heart of the AI trade. They power AI data centers that run chatbots like OpenAI’s ChatGPT, Anthropic’s Claude, and Google’s Gemini.
We didn’t buy the panic.
On Sept. 14, we showed you how our data still skewed bullish on chip stocks.
SMH was still in its Long-Term Health Yellow Zone. That’s a warning sign based on how well the stock is trading compared to its past. And it can signal a coming trend shift.
But it’s not a sell signal. That’s reserved for Red Zone entries, which show that a bullish trend has broken down.
And today, SMH is back in a Green Zone, meaning it’s a buy.
Had you taken our advice last month and stayed in this trade, you’d have made the right move. Since our bullish call, SMH is up 13%.
And some chip stocks are screaming buys right now…
That’s according to the emerging trend screen we run each morning.
It looks for stocks with strong fundamentals according to our Quantum Score that are hitting one‑month highs.
And yesterday, 16 chip and chip equipment stocks lit up at once. They include:
- Lam Research (LRCX), which makes the machines that carve circuits into silicon wafers.
- KLA Corp. (KLAC), whose tools catch tiny defects before chips leave the factory.
- ASML (ASML), the Dutch company that builds the massive machines used to print chip designs onto wafers.
That tells us this is a trend worth watching. Then we can dig deeper using the Quantum Score for standout stocks benefiting from this trend.
And near the top of the list right now is Teradyne (TER). It makes the equipment that tests chips to make sure they work before they ship. Teradyne has a Quantum Score of 91.1. That’s among the highest in the cluster of stocks hitting one-month highs.
Add TER to your watchlist today, and consider buying it before the chip stocks group pushes into new highs.
— Michael Salvatore
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Source: TradeSmith
