Kyle Bass of Hayman Capital Management—its founder and chief information officer—has long maintained that it’s a good time to get out of China. Bass’ recommendations seemingly had some impact on a slew of chip stocks with exposure to China, and several of them were down in the closing minutes of Tuesday’s trading session. Intel (NASDAQ:INTC) lost over 1.5%, while AMD (NASDAQ:AMD) was down slightly less at just under 1.5%. Lam Research (NASDAQ:LRCX) lost fractionally, while Nvidia (NASDAQ:NVDA) was hit the hardest, down nearly 5% at one point. The only gainer in the bunch was Applied Materials (NASDAQ:AMAT), up fractionally to close out the day.
Bass made it clear, in light of the recently declared “no-limits” partnership with Russia, that it was high time investors focused their attention on the United States. Bass declared the U.S. “the best market in the world,” noting that the next two decades of investing will be driven by a combination of geopolitical issues and national security policies. Bass also demanded that private sector operations immediately adhere to restrictions related to those points and stop “…push(ing) back.” Bass even went so far as to refer to the CHIPS Act as the Biden Administration’s greatest achievement.
This is not the first time Bass has said such things, either. Back in September, Bass declared that the Chinese economy was “circling the drain” and that investors should know they “…don’t make anything investing in a totalitarian government over a long period of time.” It certainly doesn’t help that there has been plenty of pessimistic data coming out of China as of late, and any hope for a “pandemic rebound” has been all but lost. Before then, back in August, Bass also noted that it was a good idea to get out of China because “…profits are not going to westerners.” Investors may disagree with Bass’ outlook, but it has at least been consistent.
Which Chip Stocks are a Good Buy Now?
Turning to Wall Street, the leader in upside potential is, without question, NVDA stock. This consensus-rated Strong Buy offers investors 48.13% upside potential on its average price target of $650.53. Meanwhile, the laggard is INTC stock, as its $36.63 average price target can only give this Hold-rated stock 1.88% upside potential.
