Semiconductor stocks were battered by market volatility earlier this year, but tech has made a strong recovery, and with several interesting trends like the Internet of Things and artificial intelligence on the rise, it is still an exciting time to be investing in chip-making corner of the technology sector.
While tech behemoths like Microsoft (MSFT – Free Report) and Apple (AAPL – Free Report) may hog all the headlines, it has really been the companies powering their technologies—the semiconductor manufacturers—that have been garnering the attention of Wall Street.
Indeed, as our “Computer and Technology” sector has gained about 22% over the past year, semiconductor companies have been a driving factor behind its growth. The aforementioned emerging tech trends have created new consumer demand, and the semiconductor makers are delivering.
Luckily, the proven Zacks stock-picking methods are effective across all industries. Check out these Zacks Rank #1 (Strong Buy) semiconductor stocks right now:
1. Mellanox Technologies, Inc. (MLNX – Free Report)
Mellanox Technologies is a leading supplier of semiconductor-based, interconnected products to world-class server, storage, and infrastructure OEMs. The company’s VPI enables standard communication protocols to operate over any converged network with the same software solution.
MLNX is on our radar after its fifth consecutive earnings beat. It is also an explosive growth pick, with earnings and revenue expected to improve by 104% and 25%, respectively, this year. The stock’s valuation is ever-so stretched at 24x forward 12-month earnings, but with its PEG sitting at just 1.8, investors are clearly still getting a good price for its growth outlook.
2. Vishay Intertechnology (VSH – Free Report)
Vishay Intertechnology is a global manufacturer and supplier of discrete semiconductors. The company has a broad portfolio of unique passive and active solutions that are tailored to the “things” being controlled in the IoT. Vishay markets its portfolio to manufacturers of everything from biometric monitoring systems to fit bands and smart appliances.
