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Moore’s Law says that the number of transistors on a silicon chip will double every two years. That premise of ever-expanding computing power has been the driving force behind the modern digital revolution. It has also meant that semiconductor stocks have been a force to be reckoned with.
But not every company that has built its business around silicon is worth investing in. The road is littered with failures like 3dfx Interactive. To stay safe and reap big gains, these seven picks should be at the top of your list if you want a piece of the semiconductor action.
Some have been in business since the PC era began, while several of these companies are relative newcomers. What they all share in common is a focus on silicon chips, and stocks that are going to continue to be strong performers.
Best Semiconductor Stocks: Advanced Micro Devices (AMD)
First up is a stellar performer among semiconductor stocks. Advanced Micro Devices was the best-performing stock in the S&P 500 in 2019, posting 148% growth. AMD stock is up 9% so far in 2020, despite the novel coronavirus pandemic.
AMD has been all but written off twice. First, after the 2000 dot-com crash, and again in 2008, when PC shipments began to stall, and AMD’s processors and graphics cards just weren’t competitive.
All of that has changed in recent years. Under the direction of CEO Lisa Su, AMD has been relentless in its development of new chip architecture. Its Ryzen processors have been taking market share from Intel in the PC space, including an aggressive push into laptops for 2020. The company’s EPYC processors are winning marketshare in the lucrative data center market. Its Radeon graphics cards are giving market leader Nvidia (NASDAQ:NVDA) fits. And both the Xbox Series X and PlayStation 5 video game consoles will be powered by custom AMD chips when they launch later this year.
Above all, as I wrote earlier this year, AMD maintains an ambitious vision for the future. Look for that vision to continue powering the company’s success.
Editor's Note: Click here for the rest of the stocks.
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