The coronavirus (COVID-19) has been punishing stocks, especially chipmakers. The Dow is down nearly 300 points today, while chip stocks are down nearly three times as much. The VanEck Semiconductor ETF (NASDAQ: SMH) is down 3% today.
It's no surprise because semiconductors are mostly made in China. The coronavirus has hurt Chinese productivity and slowed shipping while both countries try to get a handle on the virus.
Just look at what happened to Apple Inc. (NASDAQ: AAPL) stock this week, one of the companies most reliant on chips from China. The company issued a profit warning Monday because of concerns related to the coronavirus. It's share price fell by over 2% the next day after saying it will miss quarterly revenue targets because of the outbreak.
But we can use this little disruption to our advantage.
You see, semiconductors are essential to modern technology, and they're central in everything from iPhones to 5G communications equipment to cloud computing and the Internet of Things. We've been following and recommending investing in these megatrend areas for years.
There is no better way to build wealth than to find one of these trends and ride it.
And one chip stock is positioned to avoid the worst of the coronavirus fallout.
The company's business model keeps it out of China, yet it's still essential to the chip sector.
Its steady business is rewarding investors with a 5% dividend yield.
Plus, it's not just our top-rated semiconductor stock, it's our top-rated tech stock…