The best chip stocks to buy are those with the resilience to come back from a tough market. Semiconductors have gotten crushed in 2022. One of the best-known indicators, the PHLX Semiconductor Index, is down more than 33% thus far. However, things appear likely to get even worse. 

Citigroup (NYSE:C) analysts Christopher Danely and Kelsey Chia expect the market is “entering the worst semiconductor downturn in a decade given the recession and inventory build.”

They believe that a supply glut is going to lead to a round of cancellations beginning in mid-September as some chip companies have begun to sound excess supply warnings. 

This all comes as computer and video game sales decrease and the Chinese market softens. On top of that, the U.S. is tightening export restrictions directed at China and Russia. 

The broad warning is leading investors to consider which chip stocks to buy and which aren’t. 

Analog Devices (ADI)

Analog Devices (NASDAQ:ADI) hasn’t been immune to the larger issues at play affecting the semiconductor industry. The company reported a round of order cancellations in mid-August.  Those cancellations led Citigroup analyst Christopher Danely to opine that Analog Devices’ cancellation could be the first of many. 

He also believes that the company is the most defensive semiconductor firm being traded. For that reason, it is his top pick among the best chip stocks to buy. 

Analog Devices reported unexpectedly strong results as EPS figures reached $2.52 on revenues of $3.11 billion. Wall Street had been expecting EPS to reach $2.43 on $3.06 billion in revenues.

 The record quarter was the sixth straight for the Massachusetts firm. The company has been positioned to take advantage of secular growth trends including those in the automotive sector, where it has particular strengths. 

The company has also returned $5.88 billion to investors in the form of repurchases and dividends over the trailing 12 months. 

Micron Technology (MU)

On Sept. 1 Micron Technology (NASDAQ:MU) stock moved up as broad semiconductor indexes declined. A good part of that seeming contradiction had to do with the announcement that it is investing $15 billion to build a new memory fab in Idaho. 

Micron Technology is the only U.S.-based memory manufacturer. The company will build its first new memory fabrication plant in 20 years. 

The company is taking advantage of the passage of the CHIPS and Science Act and the announcement comes as the U.S. tightens export restrictions. 

This opportunity gives Micron strong positioning as a future provider of the leading-edge memory required for automotive, data center, AI and 5G. 

It also comes on the heels of a June quarter during which revenues increased 16.44% and net income jumped by more than 51%. 

Qualcomm (QCOM)

Qualcomm (NASDAQ:QCOM) stock has been plagued by the notion that it is little more than a phone chip maker.

Along with its strong handset partnership with Samsung, the company is also making headway in automotive, augmented and virtual reality, and computers among other sectors. 

That reinforced Keybanc analyst John Vinh’s target price of $220 for the chip stock, well above its current $130 price and the $182.11 consensus price given by the 32 analysts with coverage. 

Qualcomm shares are underpriced based on their current P/E ratio of 11.52. That’s well below their 10-year median of 18.58 and suggests QCOM stock possesses deep value. 

While Qualcomm cited softening demand for smartphones for the September quarter, it also signed a collaborative agreement with Samsung through 2030. That implies that its smartphone market share should remain strong for the medium term while it pursues growth opportunities. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.