Price-to-sales ratios are a quick-and-dirty way to value high growth stocks, such as chip, or semiconductor, stocks. And as you can see in the following chart, valuations have come down over the last year, but so too has growth—in most cases.
Despite the challenging macroeconomic environment (inflation, interest rate hikes and recession risks), the industry has a lot of room for growth. And once the macroeconomic environment is back under control, chip stocks could quickly sail higher. In fact, some stocks in the sector are more attractive than others, when you compare their growth rates to current price-to-sales ratios.
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