The Best Semiconductor Stocks to Buy

Semiconductor stocks are on the mend after a rough stretch and all the drivers remain in place for continued success going forward.

rendering of chip processing board
(Image credit: Getty Images)

The best semiconductor stocks have been hit by curveballs over the last year that have upended the industry.

Take for instance the Biden administration's tech war against China, which restricts the country from buying advanced chips and equipment from the U.S. Further, China's COVID-related lockdowns in key cities where chipmaking factories reside added strain to an already disrupted supply chain. And when those logistics issues began to ease, demand for chips which peaked during the pandemic had also started to decline. 

Add to that the prevalent negative economic sentiment due to the Fed hiking interest rates

Positive catalysts remain for semiconductor stocks

Still, the semiconductor landscape has shown signs of stabilization. And many of the same potential drivers for semiconductor stocks that have been in place in recent years are still relevant, namely the transformation of the automotive market toward electric vehicles (EVs) and the expansion of 5G.

There's also the continued digitization of industrial economies – which drives the growth in cloud computing, which drives data center spending, which drives the demand for more and more semiconductors. The easing of supply-chain issues could bring focus back to these catalysts next year.

Add to that artificial intelligence (AI), which has been a major positive catalyst for a number of stocks this year. Growth in AI is expected to continue too. According to one estimate from the International Data Corporation (IDC), the AI market is projected to surge from $118 billion in 2022 to $300 billion by 2026. 

How we chose the best semiconductor stocks

2022 was certainly one of the most difficult years for semiconductor stocks in recent memory. But for intrepid investors, it also created one of the greatest buying opportunities ever, particularly as many stocks have rebounded sharply in recent months.

I used my decades of experience in quantitative analysis to identify the best stocks to buy among semiconductors, seeking companies that are simply fundamentally superior, with leadership positions in growing end markets. 

I also included chipmakers that offer some grist for stock pickers who like to look below the surface for opportunities. 

With that in mind, here are five of the best semiconductor stocks to buy now.

Data is as of November 17. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. 

Louis Navellier
Contributing Writer,