The Best Semiconductor Stocks to Buy Now

Semiconductor stocks have struggled for the greater part of the past year, but all the drivers remain in place for success once the macro clouds clear.

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

The prospects were high for the best semiconductor stocks heading into 2022, but the industry has been hit by curveballs over the last year that have upended the market.

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

Still, the semiconductor landscape is not completely bleak. Many of the same potential drivers for semiconductor stocks that were in place this year are still relevant in 2023: 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.

This has certainly been one of the most difficult years for semiconductor stocks in recent memory. But for intrepid investors, it may represent what history will show was one of the greatest buying opportunities ever.

With that in mind, here are five of the best semiconductor stocks to buy now. Some of them are simply fundamentally superior with leadership positions in growing end markets. Others offer some grist for stock pickers who like to look below the surface for opportunities.

Data is as of Jan. 9. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks are listed in alphabetical order.

Louis Navellier
Contributing Writer, Kiplinger.com