7 Semiconductor Stocks to Buy and Hold Forever

The semiconductor industry has been one of the most volatile and interesting sectors in the market for the last couple of years. It may make overly cautious investors wonder if semiconductor stocks are right for them.

As an investor, you always have to consider your risk tolerance — what kind of losses you’re willing to sustain in your portfolio in the short term in order to see long-term returns. And while the semiconductor industry is down so far in 2022, the long-term potential in the space makes semiconductor stocks great candidates for buy-and-hold investors.

So far this year, the iShares Semiconductor ETF (NASDAQ:SOXX) is down 28%. But when you consider that that fund jumped 50% in 2020 and another 43% in 2021 as remote work became the norm during the Covid-19 pandemic, then the potential for semiconductor stocks becomes clear.

Supply chain issues really hurt chip stocks so far this year, but semiconductors will continue to be high demand for computers, electric vehicles, cloud computing and more.

Here are seven semiconductor stocks that have long-term potential.

Semiconductor Stocks: 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 second quarter were $2.97 billion, which beat analysts’ expectations for $2.84 billion. Earnings-per-share were $2.40, which was better than the Street’s estimate for $2.11.

Even though sales are projected to rise 61% this year to $11.8 billion, ADI stock is down 5%, making Analog Devices an interesting buying opportunity. Analog Devices has a “B” rating in my Portfolio Grader.

Advanced Micro Devices (AMD)

Advanced Micro Devices (NASDAQ:AMD) is one of the biggest semiconductor stocks on the planet. Its best-known products, include its Radeon RX Series graphics with AMD Ryzen processors for gamers, and its upcoming super-fast “Zen 4”-based Ryzen 7000 Series processors for desktop computers. It also has a line of high-performance processors, the Ryzen Embedded R2000 Series, that can power up to four displays with 4k resolution.

Earnings for the first quarter included revenue of $5.89 billion versus analysts expectations of $5.53 billion. Earnings-per-share were also better than expected, coming in at $1.13 per share versus analysts’ expectations of 93 cents per share.

AMD stock is down 40% so far this year, but it still has a “B” rating in Portfolio Grader.

Enphase Energy (ENPH)

Enphase Energy (NASDAQ:ENPH) is a top solar inverter provider, and that’s a great place to be as much of the developed world is trying to rid itself of Russian-supplied fossil fuels. Russian President Vladimir Putin’s invasion of Ukraine and the international backlash makes alternative forms of energy more appealing — and that’s where ENPH stock comes in.

Enphase is making inroads in the European Union right now as the West looks for solar/battery technology solutions. CEO Badri Kothandaraman said that Enphase Energy expects to grow sales by 40% in Europe in the second quarter.

First-quarter earnings of $441.29 million were slightly above analysts’ expectations of $433.67 million. EPS of 79 cents per share was 10 cents better than the Street’s predictions. ENPH stock has an “A” rating in Portfolio Grader.

Semiconductor Stocks: Lattice Semiconductor Corporation (LSCC)

Lattice Semiconductor (NASDAQ:LSCC) is involved in providing semiconductors for programmable logic devices. That kind of technology is critically important for autonomous vehicles, as sensors can tell if there’s an obstacle in the road and slows that car to avoid a collision.

On July 27, LSCC stock was scheduled to move from the Russell 2000 index to the Russell 1000 index, which measures the performance of the largest 1,000 companies in the U.S. Inclusion on the Russell 1000 is a sign of Lattice’s growth, and the company should get a boost in trading volume and stock price from the move.

Earnings for the first quarter included revenue of $150.52 million, which was better than the $146.25 million that analysts expected. EPS was 37 cents per share, or 4 cents better than the Street expected.

LSCC stock 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 March. On the year, it’s down 8.7% but its one of the more volatile names — at least right now — you can get in the semiconductor space.

Earnings in the first quarter were $377.71 million, which was better than the $360.41 million that analysts expected. EPS was $2.45, which was more than the $2.26 EPS that analysts predicted.

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

ON Semiconductor (ON)

ON Semiconductor (NASDAQ:ON) is outperforming the Nasdaq and other indexes — down only 11% on the year — in part because it operates its own foundries. That means that the supply chain problems that have hit the semiconductor space haven’t hit ON Semiconductor nearly as bad as some others.

As long as the demand for semiconductors continues to rise for the long term — as it most certainly will — then ON Semiconductor should be a good stock for long-term investors.

Earnings for the first quarter were $1.94 billion, which was just better than the $1.91 billion that analysts forecast. EPS was $1.22 per share, which was more than the Street’s prediction of $1.05 per share.

ON stock has an “A” rating in my Portfolio Grader.

Synaptics (SYNA)

Synaptics (NASDAQ:SYNA) works in the field of human interface hardware — things like using fingerprints to unlock a computer or phone, or voice commands for your car or smart home products.

The company, based in San Jose, California, invented computer touchpads, the click wheel on the Apple (NASDAQ:AAPL) iPod, and touch sensors on Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) Android smartphones.

The stock is down a whopping 52% so far this year as supply chain problems have been a major headwind. But interest in human interface hardware will only grow, and SYNA stock should see a nice boost in the coming quarters.

Earnings for the company’s most recent quarter, which was its fiscal Q3 2022, included revenue of $470.1 million and earnings of $3.75 per share. That was better than analysts’ expectations of $464.65 million and EPS of $3.55.

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

On the date of publication, Louis Navellier has positions in AMD, ENPH, LSCC, ON and SYNA in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.