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. * The InvestorPlace Q&A: ProShares Pet Care ETF Is a Treat for Investors 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: * Advanced Micro Devices (NASDAQ:AMD) * Intel (NASDAQ:INTC) * Maxim Integrated Products (NASDAQ:MXIM) * Qorvo (NASDAQ:QRVO) * Skyworks Solutions (NASDAQ:SWKS) * Analog Devices (NASDAQ:ADI) * Broadcom (NASDAQ:AVGO)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.InvestorPlace – Stock Market News, Stock Advice & Trading Tips Best Semiconductor Stocks: Advanced Micro Devices (AMD)Source: Sundry Photography / Shutterstock.com 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. Intel (INTC)Source: Kate Krav-Rude / Shutterstock.com Intel is the senior statesman among these semiconductor stocks. It has been focused on silicon chips since 1968. In fact Gordon Moore of Moore's Law fame is Intel's cofounder.One of Intel's key strengths is its resilience. Intel has faced challenges over the past five years that would hobble many other companies. Even as Intel's core PC market continues to shrink, AMD has been winning over consumers and manufacturers with its Ryzen processors. Intel has faced crippling chip shortages plus fallout from the Meltdown and Spectre chip vulnerabilities. It abandoned the smartphone processor market, and last year dropped its smartphone modem business, selling it to Apple (NASDAQ:AAPL). Adding to the gloomy news, it has been reported that Apple is on the verge of ditching Intel processors in its Mac PCs.So why the nod to Intel? Despite the many challenges, Intel remains a dominant force. Its new 10nm chips are beginning to hit the market, and production delays are expected to be resolved. Intel Xeon processors remain the chip of choice in the data center market, and that market is growing. Last year, Intel showed off its own Xe graphics cards, which will position it to take on AMD and Nvidia in that market. Intel is also dominant in the growing Internet of Things (IoT) sector — a key component of smart home and self-driving car technologies.Perhaps the strongest argument is that despite the many challenges, INTC stock continues to perform. Over the past five years, it's up 105%. * 7 Oil Stocks That Are Struggling to Survive In addition, Intel is generous with its dividends. Its latest quarterly dividend was 33 cents per share, paid on June 1. Maxim Integrated Products (MXIM)Source: Casimiro PT / Shutterstock.com Maxim Integrated is another of those semiconductor stocks with a long history. This company dates back to the 1980s and specializes in integrated circuits (ICs). These are the embedded chips used in a huge variety of products, ranging from cars to heath trackers to automated factory equipment.Maxim Integrated is positioned to benefit from some of the most promising areas of technology growth, including wearables, 5G wireless, automotive IoT, solar cells, military, aerospace and smart building automation.MXIM stock has posted growth of 79% over the past five years. Although it's still under water for 2020, it has been recovering from the March market selloff. At its current price, MXIM stock is up nearly 40% from its March 16 close. Qorvo (QRVO)Source: Piotr Swat / Shutterstock.com Qorvo is a relative newcomer among the semiconductor stocks scene. Founded in 2015, Qorvo describes itself as providing: "the industry's broadest portfolio of critical enabling technologies with expertise in mobile devices, complex infrastructure and global aerospace and defense applications."The RF business encompasses 5G and Wi-Fi 6, the latest tech in a red-hot communication sector. In 2019, Qorvo announced it had shipped 100 million RF devices for use in 5G infrastructure. On the foundry side, Qorvo specializes in custom solutions for the U.S. Department of Defense. That's a market that is always growing, no matter what the economic situation. Power management includes battery management components and power loss protection. Qorvo is growing through acquisition as well. Its latest purchase took place earlier this year, when it completed the purchase of Decawave — a company specializing in ultra-wideband (UWB) technology.QRVO stock was up an impressive 91% in 2019. It has been hit hard in 2020, but since bottoming out in March has re-gained nearly 66%. * The 9 Best Cryptocurrencies to Watch for the Rest of 2020 Expect that recovery to continue, based on the company's latest guidance: "While our June quarter guidance reflects the ongoing demand and supply effects of COVID-19, we are encouraged by continued growth in 5G handsets and infrastructure, and we remain confident in the long-term growth drivers of our business." Skyworks Solutions (SWKS)Source: madamF / Shutterstock.com Skyworks Solutions' primary product is radio frequency semiconductors used by smartphones to communicate with wireless networks. From 2002 through 2008, SWKS stock bounced around below the $10 level, but since 2009 it has been on a growth path. That's no surprise, given that Apple is Skyworks' largest customer, and the iPhone was the hottest-selling smartphone on the planet. That relationship can have its downside — 2018 saw SWKS stock slide, a reaction blamed on lower iPhone demand.However, 5G adoption is expected to spur iPhone demand this fall. That prospect helped to once again light a fuse under SWKS, starting in October. Before the coronavirus pandemic spooked the markets and spoiled the party, Skyworks' stock had gained 70% since the start of October. Even after a March plummet, the prospect of 5G iPhones boosting revenue for the at least the next few years has helped SWKS to recover and more. Now at the $132 level, it's up nearly 9% so far in 2020. Analog Devices (ADI)Source: Shutterstock This Massachusetts-based semiconductor company specializes in analog, mixed-signal and digital signal (DSP) integrated circuits.Its ICs can be found in products that are on the leading edge of technology, sectors that are all expected to see massive growth in coming years. This includes electric cars, self-driving vehicles, 5G infrastructure, industrial automation and smart sensors (Industry 4.0) and digital health solutions. Analog Devices claims over 100,000 customers, worldwide. The widespread use of its products, combined with a big presence in new technology sectors has served the company and its investors well. In addition, ADI has been rewarding investors with dividends and share buybacks — to the tune of $340 million last quarter. * 7 Great Biotech Stocks to Buy and Hold Now ADI stock is up 85% over the past five years, and has even managed to stay afloat in 2020. Broadcom (AVGO)Source: Sasima / Shutterstock.com Finally, another instantly recognizable semiconductor giant: Broadcom. The Singapore-based company is known for its presence in the data center and network infrastructure sectors. While other tech companies have taken a hit from the coronavirus pandemic, the move to working from home has boosted Broadcom's balance sheet. In its most recent quarter, earnings of $5.74 billion were up 4% year-over-year.Broadcom is not content to sit on its own semiconductor IP. Acquisitions are a key part of its strategy. It even took a shot at purchasing Qualcomm (NASAQ:QCOM) at the height of that company's fight with Apple. The proposed $117 billion deal would have been the biggest ever tech merger. However, in 2018, President Trump blocked it, citing security concerns.The company moved on quickly. In 2019, Broadcom snapped up enterprise security provider Symantec, for $10.7 billion. The move bolstered Broadcom's cloud offerings and helped to diversify from its reliance on hardware.AVGO stock is still down slightly for 2020, but it's well on the path of recovery. With 126% growth over the past five years and a proven track record of thinking big, Broadcom is a winner among semiconductor stocks.Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the "Master Key" to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post The 7 Best Semiconductor Stocks on the Market Now appeared first on InvestorPlace.
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The airline industry has been on fire, surging higher as American Airlines (NASDAQ:AAL) stock led the rally. United Airlines (NASDAQ:UAL) didn't miss out either, with UAL stock ripping 169% from the May lows.Source: NextNewMedia / Shutterstock.com While the stock is pulling back, shares are still up about 120% from those lows, as investor optimism climbed considerably in a short period of time. Helping to fuel that optimism has been part of the "reopening America" trade.I have been noting this trade for a few weeks now, as everything from cruise operators to restaurant stocks have come roaring back to life. But that's what this is — a trade — not an investment. There is still a lot of negativity and uncertainty surrounding these stocks.InvestorPlace – Stock Market News, Stock Advice & Trading TipsUnfortunately, UAL stock isn't excluded from that observation. Let's take a closer look at the business. Sizing Up AirlinesWhen Warren Buffett sold his airline positions, many investors wondered why the Oracle had taken so long to exit. I'm pretty neutral toward Buffett. I don't hang on his every word and move, but I have a ton of respect for one of the market's greatest investors. * 7 Great Biotech Stocks to Buy and Hold Now He exited his four airline positions — United Airlines, American Airlines, Southwest Airlines (NYSE:LUV) and Delta Air Lines (NYSE:DAL) — as he explained during Berkshire Hathaway's (NYSE:BRK.A, NYSE:BRK.B) annual meeting. But Buffett wasn't looking at the next two to three weeks or even the next couple of months. He was looking years down the road.Some have predicted that airlines won't recover 25% of their prior traffic by September. However, American Air said it plans for 50% of July 2019's schedule to fly in July 2020. America is reopening and the public is not hesitating to book trips, pack into restaurants, and put the novel coronavirus behind them. That's even as we're seeing cases on the rise again. Valuing United AirlinesEven with the recent rise in enthusiasm, the recovery to pre-coronavirus levels will take a while. And even then, remember that airlines stocks did not command a premium valuation. Do you think they will now, given the rather dire circumstances we're seeing?Remember, this isn't Apple (NASDAQ:AAPL), where the companies have robust balance sheets and delayed revenue from a dip in iPhone sales. U.S. airport traffic decreased by about 90% at the peak and is still more than 80% off year-over-year levels.DAL and LUV are the balance-sheet leaders, putting UAL stock in a tough spot. The company will weather the storm, but it's burning $40 million to $45 million in cash per day. United's balance sheet will also feel the pressure, as it borrows to stay afloat.Analysts expect United to see a 56% decline in revenue this year, with sales falling from $43.26 billion in 2019 to just $19 billion this year. In 2021, estimates call for a 65% rebound, but to just $31.73 billion. Like I said, this isn't likely to be fast recovery.After earning $12.05 per share last year, United is forecast to lose an incredible $19.49 per share in fiscal 2020. While that figure is sure to change, it shows the astronomical impact to the business. 2021 forecasts call for essentially break-even operations, with profit just $1.68 per share. That's still down 86% from 2019. Trading UAL Stock Click to EnlargeSource: Chart courtesy of StockCharts.com While the return to normalcy will benefit airlines stocks in obvious ways, it's hard to argue that the decline was an overreaction. Revenue was crushed, as expenses dragged on and the companies burned through cash. With the prospect of a slow return to flying, who is left to buy the stocks when they have rallied so much?UAL stock climbed almost 170% from the May low. The reopening of the country was more robust than expected, so a rally is deserved. However, this seems like too much, too fast.Should uptrend support fail to buoy United, look to see if the 23.6% retracement near $33 can support the stock. This level had been resistance for several months before United broke out above this mark. If it fails as support, see how UAL stock does with the 50-day moving average, currently near $28.On the upside, see if UAL can reclaim the 38.2% retracement and 100-day moving average. If it can, it puts $50 and the 50% retracement in play.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post Avoid United Airlines Stock After 120% Rally From the Lows appeared first on InvestorPlace.
Earlier this year, Luckin Coffee (NASDAQ:LK) stock was one of the hottest names out there. The coffee chain, touted as China's answer to Starbucks (NASDAQ:SBUX), looked like a solid long-term growth story. But in April, shares tumbled. With an investigation over accounting fraud, investors bailed, sending shares down nearly 76% in one day. Soon after that, Nasdaq halted trading of the company's stock.Source: Keitma / Shutterstock.com Shares resumed trading last month, initially taking another 35% dip. Then, it fell to prices as low as $1.33 per share. Yet, so far this month, investors have ignored the big red flag (accounting fraud), and have dived back into the stock. Since June 1, shares have rallied from around $2 per share to just under $4 per share. And that's after reaching prices above $6 per share on June 5.Simply put, this recent run-up is not indicative of a "turnaround" for this tarnished company. As InvestorPlace's Mark Hake wrote June 9, the recent rally is largely due to short-sellers covering their positions. Once this short-squeeze ends, expect shares to fall back to prior lows.InvestorPlace – Stock Market News, Stock Advice & Trading TipsIn short, don't get fear of missing out and buy into this company. With its growth story derailed, and reputation tarnished, expect shares to trek lower over the next few months. Why LK Stock Could Go Lower From HereShares may have fallen more than 90% below their all-time highs. But that doesn't mean bad times are over just yet for LK stock. Why? With the company's 2019 revenue numbers found to be fraudulent, who's to believe any financial results from this company going forward? * 7 Great Biotech Stocks to Buy and Hold Now Sure, the company has "cleaned house," and Luckin's former chairman is now facing criminal charges. But this is all too little, too late. Without any trust in the company's financial statements, there's no reasonable way to determine its underlying value. Forget about "overvalued" or "undervalued." For now, the company's value is a big question mark.In short, investors buying shares now are essentially buying a lottery ticket. If the company manages to ride out this scandal, shares could bounce higher, albeit far below where they were before the scandal broke.But, more likely, the stock is headed towards penny stock status. Why? It's likely to be delisted from the Nasdaq permanently. Once that happens, shares could, in theory, trade on the over-the-counter (OTC) market. Yet, with institutional and retail investors typically avoiding OTC stocks, demand for shares is going to take a big hit.Granted, the Nasdaq delisting is still pending. Luckin has requested a hearing before an exchange panel. This panel has 30 to 45 days after the request to convene. With the company pursuing this "Hail Mary" in mid-May, that means in just a few weeks we'll know whether shares continue to trade on a major exchange.This may also explain why shares haven't cratered just yet. But, with the odds firmly against LK stock, buying now on the hopes its Nasdaq listing continues looking like a gamble not worth taking. Don't Bet on a Surprise from Luckin CoffeeChances are LK stock falls to even lower prices than where it is today. Yet, there is still a slight chance the company rides out this scandal, and retains some value. As our own Ian Bezek wrote June 10, with the company's secondary offering earlier this year, they may still have plenty of liquidity. While prior sales figures were inflated, they still have a substantial presence, and generate hundreds of millions in sales.Now, don't take that to mean Luckin still has a shot at unseating Starbucks as China's most popular coffee chain. What I'm saying is, there's still a chance the company can pick up the pieces, and turn what's left into a profitable business.But, this still isn't enough to go out and buy this stock today. The risk/return proposition remains out of your favor. Until we see revised financials, we remain in the dark. For now, it's still uncertain whether shares today price in a turnaround, or if they trade far below their potential value if a full recovery happens. Forget About Buy, Sell, or Hold, LK Stock Is an 'Avoid'Speculators may have made easy money trading this stock as of late. But, don't take that to mean this is a screaming buy. At any price. With the big red flag of fraud tarnishing their reputation, there's no good reason to buy Luckin Coffee's stock right now.Firstly, due to the risk of delisting. If shares no longer trade on the Nasdaq, expect them to fall to much lower prices. Secondly, even if the company manages to bounce back from this scandal and become a profitable business, we don't know whether today's stock price reflects this upside potential or not.In short, there's still a lot to lose, and little to gain, with LK stock. Forget about "buy," "sell" or "hold." This stock is an "avoid," pure and simple.Thomas Niel, contributor to InvestorPlace, has written single-stock analysis since 2016. As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post Avoid Tarnished Luckin Coffee With Shares Bound to Head Lower appeared first on InvestorPlace.