While biotech and pharmaceutical stocks have been growth champions in 2020, their performance has a limited lifespan. Once a vaccination for the novel coronavirus is found, produced and distributed, the focus on that sector will die down. But while those industries will fade in popularity, there are still plenty of good semiconductor stocks to buy now.
That’s true because technology will continue to see big gains. From AI stocks to 5G stocks, there are plenty of opportunities for investors interested in technology. One of the most long-lived segments in the tech industry is actually at a stage when it’s once again, one of the most exciting. Silicon continues to make big leaps forward, and it ultimately powers all of that promising tech, from AI to gaming and smartphones. All of that’s a large part of why such companies frequently make it into Growth Investor.
With that in mind, here’s the latest list of the best semiconductor stocks to buy today:
- Advanced Micro Devices (NASDAQ:AMD)
- Taiwan Semiconductor (NYSE:TSM)
- Maxim Integrated Products (NASDAQ:MXIM)
- Qorvo (NASDAQ:QRVO)
- Skyworks Solutions (NASDAQ:SWKS)
- Broadcom (NASDAQ:AVGO)
- Synaptics (NASDAQ:SYNA)
Some of these have been a big deal for decades, some are relatively new and some are older companies that are resurging. All are positioned for long-term growth.
Semiconductor Stocks to Buy: Advanced Micro Devices (AMD)
Advanced Micro Devices earns a top spot on any list of semiconductor stocks to buy. The manufacturer of PC processors, graphics cards and custom silicon seemed like it had passed its best-before date in the aftermath of the 2000 dot-com crash, and once again in 2008 when PC shipments began their long decline.
But AMD came charging back. A new series of Ryzen chips began taking serious market share in the PC world. Its Radeon graphics cards became competitive once again. It began to win data center contracts. Custom silicon from AMD is powering the next generation of video game consoles: the PlayStation 5 and Xbox Series X.
Furthermore, AMD stock was the top performing stock in the S&P 500 in 2019. In 2020 — despite the challenges of a pandemic that disrupted PC manufacturer supply chains, and a September tech sector selloff — AMD is up more than 50%. AMD gets a solid ‘A’ rating in Portfolio Grader, and it’s a worthy addition to any portfolio.
Taiwan Semiconductor (TSM)
Taiwan Semiconductor — commonly referred to as TSMC — has become the world’s largest contract chipmakers. Many of the top technology companies look to TSMC’s fabrication plants to manufacture their custom chips.
With many smartphone chips coming from TSMC’s foundries and 5G having a breakout year, TSMC’s second quarter revenue was up 28.9%, while profits were up 81% year-over-year. And the company is expecting that boost in demand for its silicon chips to increase, telling investors: “Moving into third quarter 2020, we expect our business to be supported by strong demand for our industry-leading 5nm and 7nm technologies, driven by 5G smartphones, HPC and IoT-related applications.”
TSM stock has been on a growth path for the past decade, a rate that accelerated over the past five years. It’s had its ups and downs, but there’s no arguing with overall gains of nearly 300% since 2015. That growth narrative is similar to what I expect with my “AI Master Key” (a key player in our hyper connected future) … or most other stocks in Growth Investor. While the tech sector has been hammered in September, TSM stock has largely bucked the trend.
Clearly, this ‘A-rated’ stock has legs, making it one of the best semiconductor stocks to buy.
Maxim Integrated Products (MXIM)
Maxim is another one of those semiconductor stocks with a long history and plenty of potential. MXIM stock doesn’t jump out as a big performer in 2020. It’s in positive territory for the year, but at this point it is struggling to break 5%.
MXIM earns a ‘B’ rating in Portfolio Grader, but I still like its growth potential. This company doesn’t make high profile processors, instead it specializes in integrated circuits (ICs). These are the tiny embedded chips you find in consumer electronics and a wide range of other consumer and industrial products.
The ubiquity of its ICs means Maxim is poised to reap the rewards of a wide range of technologies that are beginning to go mainstream, including 5G and automotive IoT. In addition, a merger expected to take effect in 2021 means Maxim will be in an even stronger position going forward.
Qorvo is one of the newer companies on this list, with its launch just five years ago. What does the company do? I’ll let Qorvo do the talking: The company is “a diversified market leader in RF solutions … [that] provides the industry’s broadest portfolio of critical enabling technologies with expertise in mobile devices, complex infrastructure and global aerospace and defense applications.”
That RF business just happens to encompass two of the hottest wireless technologies: 5G and Wi-Fi 6. These are key, world-altering advancements that I focus on with my “AI Master Key” and Growth Investor, since the leaders here are bound for continuous growth in the years ahead. In 2019, Quorvo shipped 100 million devices for use in 5G infrastructure alone. It’s no coincidence that ‘B-rated’ QRVO stock was up an impressive 91% in 2019. Also worth noting is Qorvo’s foundry business. It has a big, repeat customer in the U.S. Department of Defense.
After a punishing March and a steep decline during the September tech stock selloff, QRVO stock continues to show its resilience. At this point in 2020, it has still managed to hit double-digit growth for the year. All of these elements add up to make it a key semiconductor stock to buy if you’re looking for growth.
Skyworks Solutions (SWKS)
Like Qorvo, Skyworks specializes in RF transmitters, but this company is very focused on the smartphone market. The fact that it supplies RF transmitters for Apple’s (NASDAQ:AAPL) iPhone kept SWKS stock on a growth path from 2009 through 2018. Slowing iPhone sales reflected the downside of relying on such a high profile customer. SWKS lost about a third of its value that year.
However, with 5G iPhones expected to kick off an upgrade super cycle, ‘B-rated’ SWKS stock has been on the rise once again. Before the recent market punishment of tech sector stocks, SWKS had posted gains of 26% in 2020, and it still remains in positive territory for the year. Skyworks is a solid example of the types of companies I like to focus on with with my investment reports since it has demonstrated a leadership position that it ought to retain for years to come, but is still bound for growth despite this foundation.
Singapore-based Broadcom stands out among other semiconductor stocks to buy for multiple reasons. Broadcom has never shied away from acquisitions, and as a result it’s a player in a wide range of tech sectors.
AVGO has a big presence in data centers, networks and smartphones. Its 2019 purchase of Symantec — an enterprise security specialist — gave Broadcom a strong foothold in the cloud computing market. The move proved timely with the focus on web security with the pandemic’s work-from-home movement.
In its most recent quarter, Broadcom beat market estimates on both revenue and earnings per share, giving the company’s stock a bump. Until a few weeks ago, AVGO stock was recovering nicely from the March market meltdown, posting a gain of 123% between mid-March and the start of September.
Strengthening the appeal of ‘B-rated’ AVGO stock is its dividend, which has paid out $3.25 per share for each of the past four quarters.
After three years of declines, Synaptics shares began to climb steeply in June 2019. Driven by a series of positive earnings surprises, it posted gains of over 80% in 2019. The growth wasn’t over. It was on fire to start off 2020, adding further gains of 27% before the coronavirus pandemic triggered the March market crash.
After that short reset, it has been on the move again. Even after the losses the tech sector has faced in September, SYNA stock is up 21% for 2020. Analysts have an overweight rating on this stock, which also earns a Portfolio Grader ‘A-rating.’
Why the positive outlook on Synaptics after the time it spent in the doldrums? The human to computer interface components this company makes — including optical fingerprint sensors, ICs for OLED displays, processors for far-field microphones used by smart home products, chips for wireless headphones and processors for video streamers — are in high demand for some of the hottest categories of high profile, high-tech gadgets.
All of that adds up to make Synaptics a stand out player among other semicoductor stocks.
It’s no secret that semiconductor stocks are among the hottest plays on Wall Street now … and the stocks listed above are all bound to be strong winners. But AI stocks are also worth a look. And there’s one in particular that far too many investors are overlooking. Their oversight is your path to significant wealth.
The “AI Master Key” is a lesser known machine learning leader that will revolutionize countless industries. From healthcare to agriculture, finance to cybersecurity, this company will be at the head of it all. It’s the key to unlocking the most significant technological revolution in human history and all the great profits that come with it.
But that’s just the tip of the iceberg for Growth Investor subscribers. Backed by the strongest research team on the market and my innovative approach to investing, Growth Investor has outperformed the S&P by a factor of 3-to-1. It’s where you can find groundbreaking growth plays like my AI Master Key long before they become household names.
On the date of publication, Louis Navellier had long positions in AMD, AVGO, QRVO, MXIM, SWKS and TSM stock. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.