Semiconductor stocks brace for gains as global chip scarcity continues to grow, affecting automotive companies most of all.

NXP Semiconductor posted first-quarter sales up 27% after last Monday, while earnings of $ 1.25 per share beat consensus.

AMD and Texas Instruments will report back after the bell on Tuesday.

With demand high but supply coming under pressure, CNBC’s “Trading Nation” asked two traders which chipmaker stocks were ahead.

“I especially like AMD for new money,” said Mark Tepper, president of Strategic Wealth Partners, on Monday.

AMD has left the rest of the chipmakers behind this year, a pullback that Tepper sees as an opportunity. The stock is down 7% in 2021, compared to a 16% increase for the SMH semiconductor ETF.

“We just increased our position in AMD by March 30th by 75%, so we nearly doubled, and apparently we learned last week that Intel’s server business sniffed again and AMD stocks popped because we all did know who ate Intel’s lunch and they’ve taken their market share in the past few years. It was AMD, “Tepper said.

Intel last week reported a 20% drop in data center revenue for the quarter ended March. Revenue from this unit was $ 5.56 billion compared to $ 6.99 billion a year earlier. AMD’s corporate segment, which includes server chips, increased 176% revenue in the fourth quarter. Analysts expect revenue of $ 1.3 billion for this unit for the first quarter that ended in March, according to FactSet, of $ 348 million.

“If you look at AMD versus Intel, AMD has better innovation, better performance, better price, and likely a two to three year competitive advantage over Intel. The most important business for AMD is still the data center. But then add that Xilinx acquisition, which diversifies their portfolio, so that would be my game here, “said Tepper.

Ari Wald, head of technical analysis at Oppenheimer, is bullish on overall chip space, arguing that these cyclical stocks should benefit in the bull market cycle. However, there is one name in particular that he considers to be the best on the show.

“You’re going to want to own stocks that tend to outperform a rising band, including semis. And one of the biggest US chip players out there is Nvidia, which is just breaking out of a seven month span and coming back and this breakout -Level at tests $ 600, I think the uptrend is picking up again. And this is a stock with a pressure of $ 700 over the next six months, “Wald said in the same interview.

Nvidia closed at $ 619.12 per share on Monday. A move to USD 700 means an upward trend of 13%.

Disclosure: Strategic Wealth Partners owns AMD.

Correction: Nvidia closed at $ 619.12 per share on Monday. In an earlier version, the day was incorrectly specified.

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