Three Semiconductor Investments to Consider on a Rebound

01/31/2025

Three semiconductor investments to consider on a rebound could offer ways to respond to the recent promising news about China's DeepSeek chatbot.
The three semiconductor investments to consider feature a company that began in 1978 as a four-person semiconductor design business in the basement of a Boise, Idaho dental office. The other two investments are exchange-traded funds that try to diversify within the semiconductor sector to include more than just the industry behemoths.
Semiconductor companies currently comprise $144 billion of the $406 billion in data center system spending, according to Gartner. That semiconductor data center spending total is expected to rise to $179 billion by calendar year 2028, based on a projected 12.5% compound annual growth rate (CAGR).
The global semiconductor industry pulled in $335 billion in revenue in 2015, according to the Gilder Technology Report. In 2025, it will more than double to nearly $690 billion, the Gilder Technology Report added.
George Gilder heads the Gilder’s Technology Report and Gilder's Moonshots.
Three Semiconductor Investments to Consider: MU
Micron Technology, Inc. (NASDAQ: MU) is a technology company based in Idaho, a state typically associated less with semiconductors and more with potatoes. It offers high-performance DRAM, NAND and NOR memory and storage products through its Micron and Crucial brands.
Micron is a current recommendation of BofA Global Research, which put a $110 price objective on the stock, based on 2.0x 2026 estimated price/book value. That valuation is within MU's long-term 0.8x-3.1x range amid what potentially could be the middle of the memory cycle.
Despite a recent pullback in semiconductor share prices due to news about big technology advances by China's DeepSeek, industry stocks still offer investors a chance for outsized growth as technology trends continue to provide powerful profitability potential.
Chart courtesy of www.StockCharts.com.

Three Semiconductor Investments to Consider: Risks Exist
Downside risks to Micron Technology, according to BofA, could come from larger-than-expected memory average selling prices (ASP) decline, greater competition from China-based newcomers like DeepSeek, share loss to large competitors and softening of demand across major end markets such as data center, smartphones, or PCs. Despite the possible pitfalls, Micron Technology has been a winning recommendation for many in recent years.
The Five Star Trader advisory service led by Mark Skousen, PhD, turned a profit of 16.42% on the stock and an overall gain of 106.29% in related options in 2021. Skousen also recommended MU stock and options to his TNT Trader advisory service in September 2019 to produce profits then, too.
Mark Skousen leads the Five Star Trader and TNT Trader services.
Three Semiconductor Investments to Consider: Popular Pick
More recently, Bryan Perry, who leads the Cash Machine investment newsletter and the Breakout Options Alert, scored a 50.30% average gain in Micron Technology call options in his trading service. That recommendation came in May 2024, but further profits could be ahead.
Paul Dykewicz interviews Bryan Perry, of Breakout Options Alert.

Three Semiconductor Investments to Consider: PSI
Investors looking for somewhat more actively managed exchange-traded funds (ETFs) can consider Invesco Semiconductors (PSI), said Bob Carlson, who heads the Retirement Watch investment newsletter. That fund tracks the Dynamic Semiconductor Intellidex Index, which evaluates semiconductor stocks based on a range of factors and is reconstituted quarterly.
The fund typically holds 30 stocks, Carlson counseled. Recently, the 10 largest positions were 46% of the fund, he added.
Chart courtesy of www.StockCharts.com.
Top positions in the fund were Broadcom, LAM Research, Applied Materials, NVIDIA and Qualcomm. The dividend yield recently was 0.68%. The fund gained 3.07% so far in 2025 and 19.42% over the last 12 months.
Bob Carlson heads Retirement Watch.
Three Semiconductor Investments to Consider: XSD
A very different strategy produces alternative returns and volatility is presented by SPDR S&P Semiconductor (XSD), Carlson continued. The fund tracks the S&P Semiconductor Select Industry Index, which comprises the semiconductors segment of the S&P Total Market Index, added Carlson, who also is the inventor of his proprietary IRA Calculator that helps investors figure out whether they should convert IRAs into Roth IRAs to reduce taxes.
The index gives the fund more stocks and less concentration than the others, Carlson opined. Smaller and mid-size companies also are more prevalent in this fund.
The fund recently held 41 stocks, with 33% of the fund invested in its 10 largest positions. Top holdings recently were Broadcom, Qorvo, Credo Technology Group, Semtech, and Allegro Microsystems.
The recent dividend yield was 0.73%. The fund gained a modest 0.12% so far in 2025 and 18.35% during the past 12 months.
Chart courtesy of www.StockCharts.com.
Three Semiconductor Investments to Consider: The Bottom Line
With technology advances occurring throughout the economy, including with China's DeepSeek, investing in semiconductor stocks and ETFs on the rebound could prove to be a shrewd strategy. From space missions and satellites above the earth to applications on the ground, semiconductors are a key component to facilitate technical advances of many kinds.

Sincerely,
Paul Dykewicz, Editor
DividendInvestor.com