Finding the best semiconductor stocks to buy involves understanding the health of the markets that buy chips for their products.
When smartphone sales rise or fall, chipmakers are impacted. The same goes for sales of automobiles, personal computers, data centers and other end markets for microprocessors.
Computer chips also are the enabling technology behind a host of emerging trends, ranging from the Internet of Things and robotics to self-driving cars and artificial intelligence.
The IBD 50 list of top-performing growth stocks currently includes four semiconductor companies: Brooks Automation (BRKS), Micron Technology (MU), Monolithic Power Systems (MPWR) and Nvidia (NVDA).
Remember, when looking for semiconductor stocks to buy, watch-lists like the IBD 50 are just a starting point. Before you buy, make sure the stocks are forming proper bases and hitting appropriate buy points
Brooks Automation
Chip-equipment maker Brooks Automation broke out of a 31-week cup-with-handle base at a buy point of 34.04 on June 14. But it retreated below that level six sessions later as the broader market turned south. Brooks shares rose 2% Friday to close the week out at 32.62 on the stock market today.
Micron
Memory-chip maker Micron also fell after a recent breakout attempt. It touched a 63.52 buy point on May 29 after forming a 10-week cup base. It dipped 1.3% Friday to finish the week at 52.44.
Monolithic Power
Fabless chipmaker Monolithic Power broke out of an eight-week, cup-with-handle base at a buy point of 125.35 on May 7. It slipped a fraction to close the week at 133.67. It is extended from its buy range but is testing support at the 10-week moving average.
Nvidia
Graphics-chip maker Nvidia is a longtime member of the IBD 50 list. It busted out of a seven-week double-bottom base at a buy point of 239.35 on May 7. It hit an all-time high of 269.20 on June 14. Since then it has slipped as the stock market weakened. Nvidia stock fell 1.6% Friday to end the week at 236.90. It erased a gain of more than 10% from the buy point, triggering a round-trip sell signal.
