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Here's why Advanced Micro and Nvidia could be your best buys in chip space

Chips are still underperforming, says Todd Gordon

Semi stocks are feeling the heat after electronics giant Samsung warned against diminishing chip sales.

The caution on Tuesday added to investor pessimism that has brought semiconductor ETF SMH down nearly 24 percent from its all-time highs.

While a number of big names like Micron, Advanced Micro and Nvidia have managed to rebound off the lows in December,'s Todd Gordon says the broader chip space isn't in the clear.

"The bounce back in the semis since the lows has been a little bit of an underperformance compared to the Nasdaq," Gordon said Tuesday on CNBC's "Power Lunch." "We're up about 7 percent from the lows with the Nasdaq up about 11 percent ."

For investors looking to play individual names in the group, Gordon suggests shares of Advanced Micro. Gordon's charts reveal how the stock has been able trade above its 50-day moving average despite the broader chip sell-off. Additionally, he highlighted a bullish double-bottom technical formation as a sign that Advanced Micro shares are a "standout with the chips." Shares of Advanced Micro have jumped nearly 25 percent from the market lows on Dec. 24.

Erin Gibbs of S&P Global Market Intelligence suggests investors consider Nvidia for a comeback play. The stock has been one of the hardest hit in the sell-off, down nearly 64 percent in just the past four months.

"I actually like Nvidia, and one of the reasons is because it's so beaten up it really looks unlikely for [Nvidia] to get much cheaper at this point," Gibbs said. "We're looking at about 50 percent profit growth for 2019. It's got good growth in restaurants and some of the gaming as well as data center spaces."

While Gibbs remains bullish on Nvidia, she advises caution for those looking to get into the broader semiconductor space. "The profit expectations from just six months ago went from a positive 5 percent now to a contracting negative 7 percent," she said. "So overall, the semiconductor industry is the one industry that we do not recommend to buy."