Start the conversation
Semiconductor stocks just got their biggest catalyst of the year.
U.S. President Donald Trump and Chinese President Xi Jinping were said to have reached a truce agreement in their trade talks at the G-20 meeting in Osaka, Japan, on Saturday, June 29.
We've kept recommending this industry - predicted to be worth $831.5 billion by 2024 according to Statista - despite the trade war because we knew it would end. Now, our top semiconductor stock is about to surge 119% higher.
Several chip stocks including Qorvo Inc. (NASDAQ: QRVO) and Skyworks Solutions Inc. (NASDAQ: SWKS) gained more than 6% when the markets opened the following week. Qorvo is still expected to gain 30% over the year, and Skyworks is expecting growth of 114%.
But neither of them are as primed for a breakout as our best semiconductor stock, which delivers the highest earnings of the three. Some analysts give it a high growth target of 119%.
And that's not a long shot. This stock has a perfect Money Morning Stock VQScore™ of 4.75, meaning its price is sure to pop any second.
But if numbers aren't enough, recent events have also served this stock well.
Yes, the truce is good for the world economy.
But there's one specific part of it we're even more excited about...
What a Truce Means for Semiconductor Stocks
We've been saying the trade war is a passing trend. All noise.
And while we're happy to see cooler heads starting to prevail, the biggest breakthrough is the United States lifting some tariffs and bans on the Chinese telecom giant Huawei.
You see, semiconductor stocks are poised to hugely benefit from the rollout of 5G networks. They are literally the basis for all the computer chips needed for 5G to operate.
5G networks are what will fuel growth in the Internet of Things market - including wearables, digital assistants, self-driving cars, and medical equipment - to their projected heights of $561.04 billion by 2022. That's 229% industry growth in under three years.
Without a new threshold for wireless speed, those technologies simply won't work. That's what makes 5G the biggest evolution in wireless communication so far.
The Biggest Tech Rollout in History is set to create an expected $1.4 trillion boom for the economy. Not only will you be able to kiss your cable box goodbye forever - you can also make a fortune. Learn more...
And while Huawei is one of the world's largest 5G technology companies, its equipment is very difficult to purchase in the United States.
U.S. officials have repeatedly expressed fears that Huawei technology could be a back door for Chinese espionage. President Trump released an executive order prohibiting U.S. government agencies, and even large U.S. tech companies like Alphabet Inc. (NASDAQ: GOOGL), from conducting business exchanges with Huawei.
Huawei has argued that if bans are not lifted, the transition to 5G will be slowed - Huawei and U.S. tech firms rely on each other's components for their products, and 5G is no different.
But if President Trump follows through on his promises to lift those bans, it could only mean a boost for the American semiconductor industry sooner than we thought.
And that's especially true for the best semiconductor stock to buy right now.
Its money-doubling potential is just the beginning...
Our Best Semiconductor Stock for the 5G Revolution
Here Are 10 “One-Click” Ways to Earn 10% or Better on Your Money Every Quarter
Appreciation is great, but it’s possible to get even more out of the shares you own. A lot more: you can easily beat inflation and collect regular income to spare. There are no complicated trades to put on, no high-level options clearances necessary. In fact, you can do this with a couple of mouse clicks – passive income redefined. Click here for the report…
About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.