"Two downgrades were just issued for Intel (INTC); these downgrades are based on the contention that, in so many words, INTC will fail to realize its revenue guidance for its third quarter," says Paul McWilliams, adding, "But I think that these analyst will be proven wrong."

The tech sector specialist and editor of Next Inning explains, "Revenue estimates provided by these analysts for all of the last five quarters have been less accurate than what you would expect if you simply pulled random numbers from a fruit jar. And, in each case, their estimates have radically underestimated INTC's performance.

"We've been holding off adding Applied Materials (AMAT) for the last several weeks in hopes that we'd be presented with a more attractive entry point; that price level has materialized, and now's the time to add this semiconductor giant to our portfolio," says Jonas Elmeraji.

The editor of The Rhino Stock Alert explains, "From the emergent technologies coming out of its research and development department to the consistent revenue streams from Applied's semiconductor equipment business, this firm has the value case and growth prospects to warrant a significantly higher share price.

"For two years chips stocks have unequivocally stunk; the industry has been mired in a host of problems, including massive overcapacity and shrinking demand," says Toby Smith, adding, "But that's changing."

In his ChangeWave Investing, he suggests, "One recommendation in this sector is SanDisk (NASDAQ: SNDK), the leader in flash memory -- one of the strongest segments in semis today."

"For the second quarter in a row the semiconductor sector is showing major signs of momentum that are so good that the industry ranked at the top of the nearly 20 industries we track each quarter.

"The bottom line is that these results clearly indicate that it is time to be invested in the semis, and the best way to do this is with two short-term plays.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

George Putnam is the newsletter advisory industry's leading authority on distressed stocks and turnaround situations. In his The Turnround Letter, he looks to semiconductor firm Teradyne (NYSE: TER), his top 2009 pick.

"Founded in 1960, Teradyne is the leading maker of automated semiconductor testing equipment. It also produces testing equipment for circuit board assemblies, aerospace and defense instruments, and automotive systems.

"The current short-term prospects for the semiconductor industry are weak, and so many of the chip stocks are down hard. Testing is a key element of semiconductor production, and so the testing equipment producers will prosper when the chip makers rebound.

"Teradyne has been the dominant player in the semiconductor testing market for quite a while and over the last couple of years the company further solidified its leadership position by acquiring competitors and buying back stock.