The chip sector has had a massive rally so far this year. MarketSmith's list of breakouts in the past few weeks finds six chip stocks trading above buy points — more than any other sector.
In a pullback Monday, two leading chip stocks remained in buy zones.
Applied Materials broke out of a cup base with a buy point of 116.19 in strong volume last week. Shares are in a buy zone to 121.99.
The chip-equipment maker has seen slower growth than most other chip companies. Sales grew 5% to 12% the past three quarters, while earnings grew 2% to 13%. Yet, Applied Materials still has a solid Composite Rating of 93.
What's outstanding about the chip stock is fund holdings. Mutual funds hold 51% of the stock. The chip stock's Accumulation/Distribution Rating of A- also indicates strong interest from institutional investors. The Santa Clara, Calif.- based company provides chip gear and software to the semiconductor industry.
Chip Stock Lattice In Buy Zone
Lattice Semiconductor is also in a buy zone, this one from a buy point of 76.57 in a cup-with-handle base. Shares broke out in strong volume last week and have pulled back into the buy zone.
Sales grew 31% to $172.5 million in the third quarter while earnings per share of 48 cents were up 71%. That's the best EPS gain of the six chip-stock breakouts reported most recently.
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Microchip, Onsemi and Cirrus Logic also are extended from breakouts that occurred within the last few weeks.
Analog Devices is trying to break out of a cup base with a 180.05 buy point.
The transportation and building sectors also have six recent breakouts in MarketSmith's screen, although those sectors are more diverse in their makeup.
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