Chip stocks just surged to an all-time high, and the charts point to more gains ahead

Semiconductor stocks just hit an all-time high, and some market watchers see new bigger gains in the cards from both a technical and fundamental perspective.

The large semiconductor-tracking exchange-traded fund, the SMH, reached an all-time intraday high Wednesday as names like Advanced Micro Devices and Intel rose. The SMH has now logged a 12 percent advance in 2018, and a 42 percent gain in the last year.

Intel is a stock within the SMH that looks particularly well-positioned, said Matt Maley, equity strategist at Miller Tabak.

The name has been a bit of a laggard, though it is "finally starting to play catch-up," Maley said Tuesday on CNBC's "Trading Nation." Indeed, while the SMH has rallied more than 100 percent in the last two years, Intel is up 65 percent in the same time frame.

"You think of this as a big, bulky company that isn't one of those sexy stocks that it was in the 1990s, but it has a lot of potential on a technical basis," he said.

Maley noted that when the market fell broadly in early February, Intel shares managed to hold their January lows, and just rose above the $50 level, which has proved recent resistance.

"We need to see a more meaningful breakout to really confirm that the thing really is going to take off, but this stock is one that has underperformed for a while, and it could play catch-up really quickly, and actually outperform over the coming months if it can indeed see a little bit more of a rally," he said.

The semiconductor group, which has the potential to see consolidation as Broadcom and Qualcomm weigh a deal, looks attractive from a fundamental perspective, said Gina Sanchez, CEO of Chantico Global.

"I do think there's a strong fundamental story for the semiconductor sector as a whole," she said Tuesday on "Trading Nation," citing forecast growing demand for semiconductors from multiple industries like autos, wireless services and cryptocurrency mining.

The SMH was trading modestly higher Wednesday.


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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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