Once considered to be a cash cow for investors, finding semiconductor stocks to buy and hold can be daunting these days. The iShares Semiconductor ETF (NASDAQ:SOXX), an exchange traded fund that holds 30 leading semiconductor stocks, is down more than 44% so far this year as a shortage of chips continues to stress the industry.

But if you’re a believer in technology and realize that semiconductors will continue to be in high demand, such a drop is pretty interesting for long-term investors. Many of these semiconductor stocks to buy and hold are on sale, and investors who buy low can see their returns go supersized in they play their cards right.

There are some indications that the chip shortage could begin to ease. The CHIPS and Science Act, passed by Congress and signed into law this year, is designed to increase semiconductor research and production in the U.S. Already, companies like Micron Technology (NASDAQ:MU) are making plans to expand their manufacturing bases in the U.S.

Where does that leave us? It’s time to go bargain shopping for semiconductor stocks to buy and hold. And the Portfolio Grader can be a great tool to help us find the best semiconductor stocks to buy now.

Analog Devices (ADI)
Analog Devices (NASDAQ:ADI) is an integrated circuit manufacturer that is a market leader in converter chips, which translate analog signals to digital. More than half of its chip sales go to industrial and automotive end markets.

Earnings in the third quarter were $3.11 billion, which beat analysts’ expectations for $3.06 billion. Earnings per share were $2.52, which was better than the Street’s estimate of $2.43.

Even though sales are projected to rise 61% this year to $11.8 billion, ADI stock is down 21%, making it among the best semiconductor stocks to buy and hold. Analog Devices has a “B” rating in my Portfolio Grader.

Monolithic Power Systems (MPWR)
Monolithic Power Systems (NASDAQ:MPWR) systems use semiconductor technology across a variety of systems, such as electric vehicle charging stations and infotainment dashboards on newer-model vehicles, cameras and sensors.

Those are great growth areas for investors to be in. And that’s why MPWR stock is an interesting semiconductor stock.

Monolithic Power is on an up-and-down streak, dropping lower than $360 at one point this year, but also trading at more than $500 in August. On the year, it’s down 34% but its one of the more volatile names — at least right now — you can get in the semiconductor space.

Earnings in the second quarter were $461 million, which was better than the $430.59 million that analysts expected. EPS was $3.25, which was more than the $2.94 EPS that analysts predicted.

MPWR stock has a “B” rating in my Portfolio Grader.

First Solar (FSLR)
When you think about First Solar (NASDAQ:FSLR), you probably think first about solar power and not semiconductors. And that’s perfectly reasonable. FSLR is one of the most well-known solar stocks out there.

It’s also one of the best-performing stocks of the year. So far in 2022, FSLR stock is up by more than 42%, with plenty of reasons to think the trend will continue. The company announced that it will invest up to $1.2 billion to scale production of photovoltaic (PV) solar modules, which could allow it to increase its power capabilities by more than 10 gigawatts by 2025.

The company says each of those modules features a layer of Cadmium Telluride semiconductor that’s thinner than a human hair. And it’s researching more ways to make products with an even thinner semiconductor layer.

Earnings in the second quarter were mixed – revenue of $620.96 million beat estimates of $606.45 million. But an earnings loss of 40 cents per share was worse than analysts’ expectations of a loss of 11 cents per share.

Even so, the potential is clear, particularly with the emergency of the Inflation Reduction Act in the U.S. that restores a tax credit for U.S. manufacturers that start production of PV projects before 2025. FSLR stock has a “B” rating in the Portfolio Grader.

SunPower Corporation (SPWR)
Continuing the run in solar stocks with a semiconductor flavor, SunPower (NASDAQ:SPWR) is down on the year but better than the overall market.

The Inflation Reduction Act, combined with Europe’s increased interest in alternative power sources, is seen as a huge positive for SunPower. The next few years are expected to be boom years for companies that manufacture solar panels, and SPWR specializes in selling and installing such panels to homeowners.

SPWR has a habit in recent quarters of beating revenue estimates but missing on EPS – and that trend continued for the second quarter of 2022. EPS of 3 cents was a penny worse than expected, but revenue of $417.77 million was about 15% better than the expected $361.49 million.

SPWR stock will continue to be a name to watch in the coming quarters. It has a “B” rating in the Portfolio Grader.

Maxeon Solar Technologies (MAXN)
The same headwinds that are pushing First Solar and other solar stocks on this list are energizing Maxeon Solar Technologies (NASDAQ:MAXN) stock. Like FSLR, Maxeon deals with solar power and the production of PV modules.

Tianjin Zhonghuan Semiconductor recently announced a $200 million investment in MAXN, a sign of China’s interest in combatting rising energy prices due in part to the war in Ukraine.

Maxeon, a spin-off from SunPower, is in more than 100 global markets and is a leader in solar power plants. It has more than 900 solar patents and is targeting top-line growth of more than 20% for the next several years.

Earnings in the second quarter included revenue of $238.08 million and an earnings loss of $1.59 per share. Both of those were better than analysts’ expectations of $220.05 million in revenue and an EPS loss of $1.62 per share.

MAXN stock is up 36% so far this year, and has a “B” rating in the Portfolio Grader.

QuickLogic (QUIK)
California-based QuickLogic (NASDAQ:QUIK) makes the list on the strength of a new multi-million-dollar government contract with the Defense Department.

The company won a $6.9 million contract with options that total as much as $72 million to for field programmable gate array (FPGA) technology to support “identified and future Department of Defense (DoD) strategic and space system requirements.”

QuickLogic’s semiconductor platform is geared to help companies adopt AI, voice and sensor processing for mobile, wearable, hearable, consumer and industrial applications as well as the Internet of Things. Those areas will be in hot demand as technology becomes more sophisticated.

Earnings for the second quarter included revenue of $4.54 million – better than the $4.47 million that analysts expected – and flat EPS that was better than the 3-cent-per-share loss that analysts expected.

QuickLogic only has a market cap of $80 million, so this is an opportunity to get in on a company in its nascent stages. The stock is up nearly 20% so far on the year, giving QUIK stock a “B” rating in the Portfolio Grader.

SolarEdge Technologies (SEDG)
SolarEdge Technologies (NASDAQ:SEDG) is another solar company that works with PV systems. The company’s intelligent inverter technology is designed to optimize power generation of PV modules and lower costs for solar power systems.

Its inverter technology is currently in solar systems in 133 countries, and with the expected increase in solar power spending in the next several years, that number will likely increase.

But you may need to be patient – earnings for the second quarter were a real disappointment. Revenue of $727.77 million was just under expectations for $729.47 million. EPS of 95 cents per share was far below the $1.40 EPS that the Street expected.

Even so, there’s real potential here and the stock is currently on sale, down 28% in 2022. SEDG stock has a “B” rating in the Portfolio Grader.

— Louis Navellier and the Investor Place Research Staff

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Source: Investor Place