Top 10 semiconductor stocks in the US, ranked by X-Ray score

The universe is every S&P 500 company that S&P Dow Jones Indices places in the GICS industries Semiconductors or Semiconductor Materials & Equipment: 20 companies, covering chip designers, memory makers and the companies that sell the machines and materials used to build chips. The industry labels are S&P's, so a company can sit here for reasons that surprise: a solar-module maker is classed as a semiconductor company because its product is built on semiconductor technology.

Foreign chipmakers that US investors know through American depositary receipts, such as TSMC or ASML, are not S&P 500 members and are therefore not scored or ranked here.

Chip demand moves in cycles, and profits swing much more than sales. At a peak, profitability and growth scores look excellent and a valuation based on peak earnings looks cheap, which is exactly when the model is most likely to flatter a company; our method flags cyclical companies at peak margins with High fair-value uncertainty for this reason. Read the fair-value label on each row together with its uncertainty, not on its own.

Of the 20 companies ranked, the leader is Micron Technology Inc, strongest on growth. The top ten span 31 points from first to tenth, a wide spread, so the first few places really do stand apart from the rest. Our fair-value models label 1 of the ten undervalued, 7 fair and 2 overvalued. The median score of all 20 companies is 48. The leader sits far above that median, which says the industry is uneven: a few companies score well on every lens while many do not.