To The Moon

🚀 AMD, ON Take Off: Second-Tier Semi Stocks = More Upsides?

Wall Street may still be obsessed with NVIDIA $NVIDIA(NVDA)$   — but second-tier chipmakers just pulled off something quietly impressive. In recent weeks, $Advanced Micro Devices(AMD)$  , $ON Semiconductor(ON)$  , $STMicroelectronics NV(STM)$  , and $NPXI have all seen bullish breakouts. These aren't your trillion-dollar giants — they’re the hungry challengers. And the market is starting to take notice.

Behind the scenes, a subtle rotation is underway. While NVIDIA ($NVDA) continues its breathtaking climb, investors are now searching for “what’s next” in the AI chip ecosystem. And second-tier semiconductor players — often overlooked — are emerging as serious contenders for upside.

Let’s break down why this shift matters and whether you should be watching these names more closely than ever.

🔍 What’s Behind the Rally?

Three forces are driving renewed enthusiasm for non-mega-cap chipmakers:

Rotation from NVIDIA into “cheaper” growth names: After NVIDIA’s jaw-dropping run past $3T, some investors are asking: Where else can I find 20–30% upside without paying 50x forward earnings?

AI infrastructure broadening: The AI boom isn’t just GPUs. It requires memory, connectivity, edge inference chips, power management, and network infrastructure. Second-tier players are getting a piece of the expanding AI pie.

Resilient auto & industrial demand: ON Semiconductor and STM in particular are riding structural trends in EVs, advanced driver-assistance systems (ADAS), and smart manufacturing — all of which require high-performance, low-latency semiconductors.

📈 Why Second-Tier Chips May Run Harder Than NVDA

Let’s be clear: nobody is saying AMD or ON will dethrone NVIDIA. But from an investor’s lens, percentage gains matter more than size alone.

Here’s why second-tier semis might deliver more upside:

Valuation gap: NVDA trades at a rich premium — ~40x+ forward P/E. By contrast, AMD trades around 30x, ON closer to 22x, STM under 20x. That gap becomes attractive when growth kicks in.

Catch-up narrative: If NVDA becomes a $5–6T stock in 2–3 years, even a modest re-rating in AMD or ON could mean massive % upside. These firms don't need to become NVIDIA — they just need to approach relevance.

Broader AI infrastructure focus: As hyperscalers scale AI deployment, demand will intensify for the chips and modules surrounding the GPU stack — where second-tier names often shine.

> Think of NVIDIA as the castle. But AMD, ON, and others? They’re the siege crew bringing in ladders, catapults, and reinforcements. The war is expanding.

💡 Who’s Leading the Pack Right Now?

A few second-tier chipmakers worth highlighting:

$AMD – With Ryzen, EPYC, and MI300 AI accelerators, AMD is one of the few capable of competing on high-performance compute. It has deep roots in gaming and server chips, but its recent AI push is turning heads again.

$ON – One of the most levered names to EVs and industrial power management. Strong margins, expanding gross profit, and bullish EV forecasts make this a “sleeper pick” for many funds.

$STM – A European juggernaut in automotive chips, STM benefits from European automaker resilience and its strong grip on microcontrollers and MEMS sensors.

$NPXI – More speculative, but gaining attention for niche applications in next-gen data connectivity and edge AI. Not a household name — yet.

⚖️ Risks to Consider

Before you rotate out of NVDA or pile into mid-cap chips, remember:

Execution risk: AMD, ON, and STM don’t have NVIDIA’s capital firepower. Product delays, weak supply chains, or demand hiccups could weigh heavily.

Capex sensitivity: Many of these names are exposed to cyclical industries like autos or industrials. If macro slows, demand could follow.

Margin pressure: Unlike NVDA’s fat gross margins (~70%+), second-tier names operate on leaner economics (~40–50%). That leaves less room for error.

Still, many believe the risk-reward is finally tilting in their favor.

🛠️ My Watch Zones

Here’s how I’d think about trading or investing in these names short term:

$AMD: Watching for clean breakout above [$170 resistance] with volume confirmation. Short-term pullbacks to [$155–160] could be buy zones.

$ON: If it holds above [$75] and breaks [$78], we could see a quick run toward [$85]. Valuation still looks fair in this range.

$STM: If European macro stays stable, STM could break out of its [$55–60] consolidation range.

Always match your strategy to your timeframe. These aren’t guaranteed rockets — but they could be reliable momentum or GARP (growth at reasonable price) plays.

🤔 Retail Angle — Should You Join the Rotation?

If you’re holding only mega-cap semis, consider this:

You might be overweight crowded trades (NVDA, AVGO, SMCI)

Adding 1–2 second-tier plays can diversify your AI exposure without chasing the top

Second-tier = less spotlight = more surprise upside

But don’t forget: lower cap = higher volatility. These names can rip — but also dip.

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💬 Final Take — Are You On Board?

We all missed NVDA at $150. The question now is: will we miss the next wave too?

As AI infrastructure expands and second-tier chip demand grows, names like AMD, ON, and STM could quietly build their own rally — with less fanfare but strong tailwinds.

So here’s the challenge:

Would you rotate now, or stay safe with the kings? Which of these will double first? Are second-tier semis your next multibagger bet — or just lagging shadows?

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