As the lifeblood of the technology sector ecosystem, acquiring the best semiconductor stocks in July almost represents a no-brainer. To be sure, every segment of the capital markets carries downside risk. You’re going to want to conduct your own due diligence. Still, the chipmaking space carries massive potential.
First, we should talk about the outright numbers influencing semiconductor stocks to buy. According to Precedence Research, the global semiconductor market reached a valuation of $591.8 billion in 2022. From 2023 to 2032, experts project that the sector will expand at a compound annual growth rate (CAGR) of 12.28%. At the forecast culmination, the industry may clock in at over $1.88 trillion.
Second, investors may have better odds of success targeting high-potential semiconductor stocks. For example, while everyone loves talking about artificial intelligence these days, it’s difficult to know which specific player will win. However, all AI protocols require advanced chips. Thus, targeting this space should prove profitable.
If you’re ready to take the leap, below are the top semiconductor stocks for July.
A quiet but extremely relevant idea among the best semiconductor stocks in July, Photronics (NASDAQ:PLAB) is a leading worldwide manufacturer of integrated circuit and flat panel display (FPD) photomasks. Per its corporate profile, photomasks are high-precision quartz plates that represent a key element in the IC and FPD manufacturing process. Since the start of the year, PLAB skyrocketed by nearly 52%.
While Photronics certainly carries concerns about being overheated, that doesn’t quite appear to be the case. Right now, the market prices PLAB at a trailing multiple of 12.79. As a discount to earnings, Photronics ranks better than 74.49% of the competition. Also, PLAB trades at a sales multiple of 1.83. In contrast, the sector median value stands at 2.86 times.
However, it’s no slouch in the operational department, with a three-year revenue growth rate (per-share basis) of 19.2%. This stat beats out 67.44% of its peers. Therefore, PLAB deserves consideration for semiconductor stocks to buy based on quietly getting the job done.
Based in Plano, Texas, Diodes (NASDAQ:DIOD) is a global manufacturer and supplier of application-specific standard products within the discrete, logic, analog, and mixed-signal semiconductor markets. As with Photronics above, Diodes doesn’t exactly generate headlines on a frequent basis. However, DIOD ranks among the best semiconductor stocks in July for offering broad critical services to the tech sector.
In the charts, DIOD performs quite well. Since the beginning of this year, shares returned nearly 18% of equity value. Over the past 365 days, they’re up nearly 47%. However, what’s quite attractive about Diodes is the value proposition. For example, the market prices DIOD at a trailing multiple of 12.52. As a discount to earnings, the company ranks favorably below 75.22% of its peers.
On the operational side, Diodes features a three-year revenue growth rate of 21.7%, outflanking 73.09% of sector rivals. Also, its trailing-year net margin stands at 75.91%, beating 75.91%. Therefore, DIOD makes a solid case for top semiconductor stocks for July.
Tower Semiconductor (TSEM)
An Israeli enterprise, Tower Semiconductor (NASDAQ:TSEM) manufactures integrated circuits using specialty process technologies. According to its corporate profile, Tower is the leader in high-value semiconductor foundry solutions, providing tech and manufacturing platforms for ICs in growing arenas such as consumer, industrial, automotive mobile, and infrastructure, among others. Unlike other names for best semiconductor stocks in July, TSEM isn’t off to a great start this year.
Indeed, since the Jan. opener, TSEM slipped more than 15%. In the trailing one-year period, shares crumbled over 20%. Still, the red ink might be a case of a decent enterprise falling temporarily under poor circumstances. For example, Tower commands a strong balance sheet, particularly a sector-average-beating cash-to-debt ratio of 3.88.
Further, the market prices TSEM at a forward multiple of 17.6. As a discount to projected earnings, Tower ranks better than 68.66% of the competition. Also, it’s priced at 2.07 times tangible book value, which is also discounted. Thus, it makes a case for high-potential semiconductor stocks for patient investors.
Headquartered in Geneva, Switzerland, STMicroelectronics (NYSE:STM) designs, develops, manufactures, and markets products that offer various solutions. These include discrete and standard commodity components, application-specific integrated circuits, full custom devices, and semi-custom devices for analog, digital, and mixed-signal applications. Thanks to its broad relevancies, STM makes a great case for the best semiconductor stocks in July.
Further, the market loves STMicroelectronics (which goes by ST for short). Since the Jan. opener, company shares popped up almost 39%. In the trailing one-year period, the security gained nearly 63%. Even with the outperformance, Gurufocus points out that STM represents great value. In particular, the market prices shares at a forward multiple of 11.29. As a discount to projected earnings, the company ranks better than 84.33% of the competition.
Also, it benefits from a Piotroski F-Score of 8 out of 9, indicating high operational efficiency. As well, its Altman Z-Score of 6.19 suggests a low risk of imminent bankruptcy. Taken as a whole, STM is an excellent choice for investing in semiconductor stocks that are presently underappreciated.
Taiwan Semiconductor (TSM)
A powerhouse among the best semiconductor stocks in July, Taiwan Semiconductor (NYSE:TSM) is a multinational chip contract manufacturing and design company. Per its public profile, TSM is the world’s most valuable semiconductor company, the world’s largest dedicated independent semiconductor foundry, and its country’s largest company. That’s quite a trifecta.
Even better, the market recognizes these facts, sending shares higher despite TSM obviously being under the glare of geopolitics. Since the January opener, the security gained over 36% of its equity value. Over the past five years, TSM swung up 171%.
Despite its enormous pertinence to the global tech ecosystem, the market prices TSM at a forward multiple of 18.07. As a discount to projected earnings, Taiwan Semi ranks better than 61.19% of sector rivals. Combined with a sizable three-year revenue growth rate of 28.4% and a massive trailing-year net margin of 43.71%, TSM makes a relatively easy case for semiconductor stocks to buy.
Lattice Semiconductor (LSCC)
Headquartered in Hillsboro, Oregon, Lattice Semiconductor (NASDAQ:LSCC) makes an intriguing case for the best semiconductor stocks in July. According to its corporate profile, Lattice designs and manufactures programmable logic devices, field-programmable gate arrays, and related software development tools. Further, the company offers a range of solutions for various applications, including communications, computing, industrial, automotive, and consumer electronics.
As with most other names on this list of top semiconductor stocks for July, the market responded well to LSCC. Since the Jan. opener, shares gained almost 46% of equity value. In the trailing one-year period, they more than doubled. To be fair, against several commonly gauged metrics such as the price-earnings (PE) ratio, LSCC appears overvalued.
However, the price-earnings-growth ratio still lands at 0.85, below the sector median of 1.18 times. Thus, investors may be able to extract some value here despite the sharp lift in shares. Given the fundamental relevancies, LSCC makes a solid case for high-potential semiconductor stocks.
Vishay Intertechnology (VSH)
Based in Malvern, Pennsylvania, Vishay Intertechnology (NYSE:VSH) manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic components. These units are essential to innovative designs in the automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical markets. While VSH had a relatively quiet year, shares blossomed after Vishay posted strong results for its first quarter.
Since the beginning of this year, VSH gained almost 36% of its equity value. In the trailing one-year period, shares moved up over 69%, stunning observers. Nevertheless, it’s possible that VSH could swing even higher. For example, the market still prices VSH at a forward multiple of 10.02. As a discount to projected earnings, Vishay ranks better than 93.28% of its peers.
Also, the company enjoys decent operational efficiency, as evidenced by its Piotroski F-Score of 7 out of 9. Finally, with a net margin of 12.43%, Vishay makes an enticing idea for those interested in investing in semiconductor stocks.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.