Over the past three years, the semiconductor arena cooled as the 5G upgrade cycle ended, shipments of new PCs declined in a post-pandemic market, and economic headwinds throttled the growth of the enterprise and industrial sectors. Rising interest rates also compressed their valuations and drove investors toward more conservative stocks.

However, a lot of chip stocks stayed strong through that slowdown as investors focused on their cyclical recoveries. That's why the Philadelphia Semiconductor Index rallied 57% over the past 12 months as the S 500 advanced only 22%. Some investors might be reluctant to buy more chip stocks after those big gains, but I think it's still safe to buy Taiwan Semiconductor (NYSE: TSM), (NASDAQ: AMD), and Micron (NASDAQ: MU) before more bulls rush in and drive their stocks to new all-time highs.

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Source Fool.com