Semiconductors are the core infrastructure powering the Information Age. The way we live and work is also changing with AI, which is creating secular demand for more powerful chips. As a result, the industry has seen solid stock price performance over the last six months as its gain of 70.4% has outpaced the S&P 500’s 22.9% return.

Regardless of these results, investors must exercise caution as the rapid pace of innovation can easily turn today’s winners into tomorrow’s losers. Taking that into account, here are two semiconductor stocks boasting durable advantages and one we’re steering clear of.

One Semiconductor Stock to Sell:

Amtech (ASYS)

Market Cap: $132.9 million

Focusing on the silicon carbide and power semiconductor sectors, Amtech Systems (NASDAQ: ASYS) produces the machinery and related chemicals needed for manufacturing semiconductors.

Why Should You Dump ASYS?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 15.8% annually over the last two years
2. Poor expense management has led to operating margin losses
3. Earnings per share fell by 17.8% annually over the last five years while its revenue grew, partly because it diluted shareholders

Amtech is trading at $9.35 per share, or 71.4x forward P/E. If you’re considering ASYS for your portfolio, see our FREE research report to learn more.

Two Semiconductor Stocks to Buy:

KLA Corporation (KLAC)

Market Cap: $135 billion

Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.

Why Is KLAC a Good Business?

1. Impressive 15.9% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Offerings are difficult to replicate at scale and result in a best-in-class gross margin of 60.5%
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety

KLA Corporation’s stock price of $1,023 implies a valuation ratio of 29.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

Nova (NVMI)

Market Cap: $9.46 billion

Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.

Why Will NVMI Beat the Market?

1. Impressive 21.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Earnings growth has trumped its peers over the last five years as its EPS has compounded at 34.1% annually
3. Robust free cash flow margin of 28.2% gives it many options for capital deployment

At $320.50 per share, Nova trades at 37.1x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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