Semiconductor Stocks To Buy And Watch Ahead Of Q4 Earnings Season

Finding the finest semiconductor stocks to purchase involves understanding the health of the markets that acquire chips for their products.

When smart device sales rise or fall, chipmakers are affected. The same chooses sales of individual computers, servers for information centers, and other large end markets for microprocessors.

Semiconductor stocks turned south in late 2018 amid slowing demand, particularly for memory chips. In 2019, global semiconductor sales dropped 11.9% to $418.3 billion, research company Gartner said.

Chip stocks rose in 2020 as the semiconductor market emerged from a cyclical downturn, regardless of the Covid-19 pandemic.

The semiconductor market is an essential sector to see since chips play an important role in innovations. Computer system chips are the enabling technology behind a host of emerging patterns, from the Web of Things and 5G wireless to self-driving cars and synthetic intelligence.

Top Semiconductor Stocks On IBD Watchlists

The IBD 50 list of top-performing development stocks presently consists of 10 semiconductor market names. A month ago, the list had six chip stocks.

IBD’s extremely selective Leaderboard list consists of 3 chip industry stocks.

The MarketSmith Development 250 list now has 26 semiconductor stocks. 3 months earlier, it had simply seven. The Growth 250 is a curated list of high-potential stocks poised for possible breakouts.

Keep in mind, when looking for the finest chip stocks to purchase, watchlists like the IBD 50 and MarketSmith Development 250 are simply a beginning point. Prior to you buy, ensure the stocks are forming correct bases and striking proper buy points under the ideal market conditions.

Monolithic Power Systems

Monolithic Power Systems( MPWR) ranks first out of 31 semiconductor stocks in IBD’s fabless chipmaker industry group. MPWR stock sports a best-possible IBD Composite Score of 99, according to the IBD Stock Checkup tool. The Composite Ranking ratings a stock’s essential development metrics versus all other stocks no matter market group.

The Kirkland, Wash.-based company has posted 4 consecutive quarters of speeding up sales and profits development.

On Dec. 23, MPWR stock broke out of a third-stage cup base at a buy point of 358.79, according to IBD MarketSmith charts. Ever since it has traded just in or out of the 5% chase zone.

Monolithic sells energy-efficient semiconductor power systems utilized in commercial applications, telecom facilities, cloud computing, automobile, and consumer applications.

Taiwan Semiconductor Manufacturing

Top chip foundry Taiwan Semiconductor Production( TSM) is leading the race to make semiconductors at ever-smaller circuit widths.

Its contract manufacturing operations have lifted numerous fabless semiconductor businesses including AMD( AMD) and Nvidia( NVDA).

Taiwan Semiconductor ranks second out of 32 semiconductor stocks in IBD’s chipmaker market group. It has an IBD Composite Score of 97 out of 99. Macom Technology Solutions( MTSI) is first in the group with a 98 Composite Score.

On Dec. 1, Taiwan Semiconductor stock broke out of a rare rising base at a buy point of 102.54, according to MarketSmith charts. It is now extended beyond the buy zone of its breakout.


Wireless chip maker Qorvo( QRVO) is among a number of semiconductor stocks gaining from the transition to 5G cellular innovation.

Qorvo stock has formed an ascending base with a buy point of 171, according to MarketSmith charts. That buy point is 10 cents above its recent high of 170.90, reached on Dec. 8.

Qorvo stock has been surging because the Greensboro, N.C.-based business delivered better-than-expected fiscal second-quarter outcomes on Nov. 4.

QRVO stock ranks 3rd in IBD’s Electronics-Semiconductor Manufacturing market group. It has an IBD Composite Ranking of 96.


Fabless chipmakerSiTime( SITM) has been on a tear lately. It is trading just below its all-time high of 118.60, reached on Dec. 17.

SiTime stock went public in November 2019 at $13 a share.

The Santa Clara, Calif.-based company focuses on making microelectromechanical systems, understood as MEMS, for timing gadgets in a host of electronics.

SiTime stock ranks No. 14 in IBD’s Electronics-Semiconductor Fabless industry group. It has a Composite Ranking of 88.

Applied Products

Semiconductor equipment maker applied Products( AMAT) is seen gaining from increasing chip-gear spending in 2021. Financial investment bank Needham rates AMAT stock as its “top pick” in the semiconductor-equipment section for the year ahead.

The Santa Clara, Calif.-based company is tied for 2nd location amongst 34 semiconductor stocks in IBD’s chip-gear industry group. Applied Materials stock has an IBD Composite Score of 98.

On Nov. 5, AMAT stock broke out of an 11-week consolidation period at a buy point of 70, according to MarketSmith charts. It presently sells the 20%- to-25% profit-taking zone of its breakout.

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