Finding the Next Great Semiconductor Stock

Meme stocks have shown just how much temporary influence retail investors can have on the stock market. Look no further than the recent surge in any stock associated with the letters “AI.” If ChatGPT is churning out amusing copy, it must be a great time to buy “AI stocks,” right? Never mind doing any due diligence, just search for company names that contain AI. A similar behavior was observed nearly two decades ago when companies with “nano” in the name soared to the moon.

Then there’s the often repeated mistake of ticker confusion which isn’t just about fat fingering the wrong ticker. Researchers have shown remarkable return profiles associated with tickers that look the same. From an article by Quartz:

One spectacular example was when, as the researchers document, the stock price of Tweeter Home Entertainment Group surged by more than 1,000% on Oct. 4, 2013. The company traded under the ticker TWTRQ, and social media giant Twitter had just filed plans for its IPO—it listed the following month, with the ticker TWTR.

Credit: Quartz

Even the trading algorithms get it wrong every now and then, something known as “the Anne Hathaway Effect.”

The power of a company’s brand can also have an impact on investor perceptions. For example, one of the more popular search phrases surrounding semiconductor stocks is, “is NVIDIA the next Intel?” At least based on market cap, the answer is a resounding yes, as NVIDIA is 4X the size of Intel. But when it comes to reven