1 Little-Known Chip Stock Is a Top Buy Right Now
One of the most important reasons to avoid investing in semiconductor stocks is because of industry cyclicity. As technology trends ebb and flow, spending on chips in the global economy can be highly volatile. A couple of years of boom time can be followed by sales droughts -- leading to some wild swings in stock prices.
Nevertheless, as volatile a space as it might be, it's also profitable -- global demand for chips is poised to rise over the next decade. That's why Synopsys (NASDAQ: SNPS) might be worth a look. It offers the growth of the chip industry, but with the more steady, predictable financial results of a software business. Here's why it's a top buy right now.
Synopsys specializes in what's known as electronic design automation (EDA). EDA is software that helps a semiconductor company design and test chips. Additionally, Synopsys also provides chip design templates that a company could license and incorporate into its own custom design. This helps simplify the process of engineering new chips and computing systems by utilizing a tried-and-true blueprint in areas not needing new work.
Source Fool.com
