Top Semiconductor Stocks for the Fourth Quarter of 2020


Oct. 28 2020, Updated 12:57 p.m. ET

Semiconductors are so small, yet so crucial to our daily lives. They live in our smartphones, computers, medical equipment, and more. You're using one of these chips as you read this article. For investors interested in commodities, semiconductor stocks may be your next big move. This is especially true as Advanced Micro Devices (AMD) just acquired competitor chip maker Xilinx. Here are the top semiconductor stocks for Q4 2020.

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By now, NVIDIA (which trades under the stock symbol "NVDA") is a classic semiconductor stock in the U.S. market. This American chip-designing company has surpassed Intel's valuation by at least $100 billion, thanks in part to its minimized outward spend, because it designs but doesn't manufacture. NVDA saw a 5.75 percent dip since last week (not unlike the rest of the market), but its 115.16 percent growth YTD is nothing to ignore.

Advanced Micro Devices

AMD just acquired one of its competitors, Xilinx. The company is also one of the top stocks for millennial investors. With this week's bear run bringing it down 10 percent in less than two days, it's actually a good time to hop in on AMD. Compared to other sectors, the stock was minimally affected during the February 2020 market crash, and it's grown 56.70 percent YTD.

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Taiwan Semiconductor

With a market cap of $394.45 billion, TSM is one of the biggest players in the semiconductor game. Located in Taiwan, this company keeps its advanced technological secrets well—and Chinese engineers continue to vie for the know-how. Though the stock fell 5.24 percent since last week, that pretty much breaks TSM even from the start of October. TSM has risen 60.03 percent YTD. 

Lam Research

The materials used to make semiconductors have to come from somewhere, right? That's where Calif.-based Lam Research Corporation comes into play. With a $48.53 billion market cap, LRCX is down 6.7 percent in the short term but up 12.84 percent YTD. While more volatile than others on this list, now is a good time to snag LRCX sales.

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Experts expect Qualcomm to surpass $21 billion in sales for FY 2020, and that's no surprise. This company holds a notoriously firm grip on the sector, so much so that it has found itself in court over issues like patent and trademark licensing. There are no legal issues on the docket at the moment, though. Unlike the others on this list, QCOM stock did fall hard during the market crash at the start of the pandemic, but it has managed to rally into the green by an impressive 99.62 percent since, making the overall YTD increase 37.73 percent.

What the AMD-Xilinx deal means for semiconductor stocks

The recent AMD-Xilinx all-stock deal worth $35 billion has revamped interest in semiconductor companies. These aren't companies you see on cable TV commercials, and they're not ones you'd recognize right off the bat. However, they're crucial to our lifestyle and serve a pivotal purpose in the market. AMD and Xilinx aren't the only players in the game, and these top semiconductor stocks are evidence.


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