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Actionable news in INTC: Intel Corporation,

Chip stocks are cool again, but reality is here

Investors suddenly have their eyes on chips again.

Chip stocks have been a volatile bunch for years, and a recent spike for many semiconductor companies could turn around yet again this earnings season as investors see that the expected gains could take awhile.

So far this year, the stocks of chip companies like Nvidia Corp. NVDA, -3.49% Advanced Micro Devices Inc. AMD, -4.44% and Micron Technology Inc. MU, +1.32% have greatly outperformed the S&P 500 index SPX, -0.25% Nvidia is up 46% this year, with its chips powering the artificial intelligence functions in servers and self-driving cars, while Micron has surged 32%, along with memory prices. The Philadelphia Semiconductor Index SOX, -1.98% has gained nearly 22% so far in 2017.

PHLX Semiconductor Index

This week might bring some more sobering thoughts to this recent hoopla though. On Tuesday, AMD reports its second quarter results, and investors will be focusing on its outlook and any commentary around three key issues: customer wins for its new Epyc server chips, the early performance of its new Ryzen chips for desktops and laptops, and any comments on the performance and expectations for AMD’s graphics chips in the market for digital currency mining.

AMD’s shares have been on a...