Why the "Chip Dip" Is a Semiconductor Stock Buying Opportunity

A U.S.-China trade war hasn't favored the technology sector. But we're still seeing the current dip in the chip market as an incredible discount on semiconductor stocks.

In fact, our favorite chip stock undercuts the industry by 21% right now. And though it sounds unbelievable, that stock is projected to earn almost 40% in profits for today's investor in a matter of months.

Thanks to a massive oncoming catalyst, we know the current tariff situation with China can't stymie the U.S. economy for long.

The semiconductor sector is actually a good leading indicator for the overall market. And it's revealed signs of life in recent weeks, peaking ahead of the S&P 500.

But that was only a hint of things to come for this industry - new innovations that will far outweigh the impact of any global controversy.

Our favorite semi stock is vital to this movement, and it's poised to profit the most once it kicks off. But first, here's why there's no stopping chip stocks.

5G Can Withstand a Trade War

Not only will the trade war eventually end, but the spread of fifth-generation wireless communications - or 5G, for short - will propel semiconductor shares to extreme new heights.

These companies already provide the chips used in everything from networks, to cloud storage, to all the smart devices we use every day. 5G changes the status quo for everything they produce.

The 5G connection will utilize the cloud and offer data speeds 50 to 100 times faster than current 4G networks. It will also be part of key infrastructure for many different companies and industries.

And this is a huge market. The communications research firm CCS Insights predicts there will be 1 billion 5G users by 2023.

5G Is Coming: The tech breakthrough of the century could rest on this $6 stock - get all the details here.

That's why it pays to invest in companies providing the products and services getting 5G off the ground.

Our favorite chip stock is one of these.

And there is no better growth stock. We confirmed this by using our proprietary Money Morning Stock VQScore™ system.

This stock hit a perfect score of 4.75.

Here's the investment that could earn you tenfold profits once the 5G wave takes hold.

Our Top Semiconductor Stock Pick

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One of our top-ranked semiconductor stocks is NXP Semiconductors NV (NASDAQ: NXPI).

This company is in prime position to grab a share of the burgeoning 5G market.

Based in the Netherlands, NXP produces different chip solutions for cars, identification, mobile, wireless infrastructure, and mobile software.

Behind the scenes, NXP earned a top VQScore on Money Morning's proprietary stock ranking system, telling us that this is a company with serious breakout potential.

We can still use that performance to our advantage, because at current levels, NXPI stock trades for less than 13.5 times its trailing 12-month earnings. That's a 21% discount to major stocks in the sector. And even better, it trades at 10 times next year's estimated, or forward, earnings.

That's why Wall Street analysts are predicting a 37% gain for NXP over the next 12 months. But we're even more bullish.

NXP is well positioned in the industry, and now it's priced well. Once the current uncertainties with China clear up, it will be in great position for some serious gains as it rides the 5G wave higher.

5G Is Coming: The Breakthrough of the Century Could Rest on This $6 Stock

CNBC reports that this opportunity is worth $12.3 trillion... and it's gearing up to make an appearance all over America.

In fact, some of these devices are showing up right in your neighborhood - and I'm willing to bet you didn't even notice.

Our Silicon Valley insider mapped out all the details in this report.

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