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Semiconductor ETF Tops in April: 5 Stocks Leading the Rally

Sweta Killa

The semiconductor corner of the technology sector, no doubt, led the broad market rally and is the clear winner in April. iShares PHLX Semiconductor ETF SOXX topped the list of the best performing ETFs, with impressive returns of more than 8% (read: Chipmakers on Fire: ETFs & Stocks Soaring to New Highs).

The rally was mainly driven by strong optimism over the deal between the two largest countries to end a year-long trade war that badly shook the industry last year. This is because chipmakers have a significant exposure in China. Rising demand for cutting-edge technology, including cloud computing, big data, Internet of Things, wearables, gaming, autonomous cars, VR headsets, drones, virtual reality, artificial intelligence and machine is also fueling growth.

Additionally, the deployment of 5G (fifth-generation) technology — the next wireless revolution — is creating further opportunities. The wave of mergers and acquisitions provides further impetus to the space (read: Bet on NVIDIA's Largest-Ever Deal With These ETFs).

Chipmakers power much of the world’s technology with their new innovation and set the stage for digitalization in various corners like healthcare, transport, financial systems, defense, agriculture, retail and many others.

Let’s take a closer look at the fundamentals of SOXX.

SOXX in Focus

This ETF offers exposure to U.S. companies that design, manufacture, and distribute semiconductors by tracking the PHLX SOX Semiconductor Sector Index. It holds 30 stocks in its basket with higher concentration on the top firms. The fund has AUM of $1.3 billion and trades in a solid volume of around 734,000 shares. It charges 47 basis points in annual fee and has a Zacks ETF Rank #3 with a High risk outlook (read: 6 Top ETFs of April).

Though most of the stocks in the fund’s portfolio delivered strong returns, a few have gained in double digits. Below we have highlighted those five best-performing stocks in the ETF of April with their respective positions in the fund’s basket:

Best Performing Stocks of SOXX

Qualcomm Incorporated QCOM: This company is a world leader in 3G, 4G and next-generation wireless technologies. It gained about 53% in April. Qualcomm currently has a Zacks Rank #3 (Hold) and a VGM Score of F. The stock occupies the top position in the fund’s portfolio, making up for 11.3% share.

Silicon Laboratories Inc. SLAB: This is a leading provider of silicon, software and solutions for the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. It also delivered incredible returns of 31.9% in the month. The stock has a Zacks Rank #3 and a VGM Score of D. SLAB accounts for 0.7% of SOXX (read: Chip ETFs Hitting Highs Ahead of Q1 Earnings).

Marvell Technology Group Ltd. MRVL: This is a leading designer, developer and supplier of mixed-signal and digital signal processing integrated circuit for high-speed, high-density, digital data storage and broadband digital data networking markets. The stock rose about 26.8% in the month. It currently carries a Zacks Rank #4 (Sell) and has a VGM Score of D. MRVL makes up for 2.6% of the total assets.

Teradyne, Inc. TER: This company is a leading supplier of automation equipment for test and industrial applications. The stock makes up for 4.7% of the assets in the SOXX portfolio. It gained 23.2% in April. Teradyne sports a Zacks Rank #1 (Strong Buy) and VGM Score of D. You can see the complete list of today’s Zacks #1 Rank stocks here.

Microchip Technology Incorporated MCHP: This company develops, manufactures and sells specialized semiconductor products used by customers for a wide variety of embedded control applications. The stock rallied 19% in the month and accounts for 3.7% allocation. Microchip Technology has a Zacks Rank #3 and VGM Score of B.

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Marvell Technology Group Ltd. (MRVL) : Free Stock Analysis Report
 
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
 
iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports
 
Silicon Laboratories, Inc. (SLAB) : Free Stock Analysis Report
 
Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report
 
Teradyne, Inc. (TER) : Free Stock Analysis Report
 
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