After hitting a peak in September of 660, the SOX index, which tracks the chip stocks, plunged almost 10%. Seasonal factors and a burn-off of inventory builds are thought to be issues that led to the sell-off. The question going forward is whether the fourth quarter will provide a rebound for tech investors that like the sector. In a new research report, the analysts at Cowen think that the inventory issues have run the course, and the set-up for a good fourth quarter and first quarter of 2015 for the top chip stocks seems to be in place.

While PC sales are flattish, both NAND and DRAM memory are solid, with much of that strength coming from strong Apple iPhone 6 sales. Here are five chip and chip equipment stocks rated Outperform at Cowen that have very bright prospects.

Applied Materials Inc. (NASDAQ: AMAT) has long been the powerhouse name in chip capital equipment. The company is ramping up its efforts to be a bigger player in the NAND sector. For Applied Materials, where its share has been low in this arena, the new architecture throws open a big sales opportunity. We have noted in past reports a rising short interest position in the stock. Positive results in the third and fourth quarters could chase the short sellers fast.

Applied Materials investors are paid a 1.95% dividend. The Cowen price target for the stock is posted at $26. Thomson/First Call price target is $25.10, and the shares closed Monday at $20.60.

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Broadcom Corp. (NASDAQ: BRCM) has often thought to be skewed more to Samsung for earnings, but the company is expected to be the supplier for a Wi-Fi/BT/GPS chip for the Apple Watch that is similar to the one it provided for the iPhone 5s. That may be helpful for the stock after Samsung’s dreadful report. Broadcom has had a fantastic run this year, up over 35%, and continued strong sales to Apple could keep the company on the upward trajectory.

Investors in Broadcom are paid a 1.25% dividend. Cowen has a strong $50 price objective. The consensus target is $43.31. Shares ended trading on Monday at $38.94.

Exar Corp. (NYSE: EXAR) is a fabless semiconductor company, engaged in the design, development and marketing of high-performance analog and mixed-signal integrated circuits, and sub-system solutions for data and telecommunications, networking and storage, industrial control and consumer applications. The company’s new Panther II product has already won designs and should recognize solid revenue gains for this year. Exar also recently announced a new family of USB to serial bridge devices for industrial applications.

Cowen has an $11 price target for the stock, and the consensus figure is $12.80. The stock closed Monday at $8.65 a share.

Lam Research Corp. (NASDAQ: LRCX) is another top chip equipment stock to buy now at Cowen. The company designs, manufactures, markets, refurbishes and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers plasma etch products that remove materials from the wafer to create the features and patterns of a device. Many Wall Street analysts have highlighted the company and its peers as having a significant equipment opportunity from the NAND revolution.

Investors are paid a 0.95% dividend. While the Cowen price target is $85, the consensus target is lower at $78.80. Lam Research closed trading Monday at $74.84.

Qualcomm Inc. (NASDAQ: QCOM) is not only a top stock to buy at Cowen, but many of the top firms we cover on Wall Street are very positive on it. The company shipped 225 million mobile station modem chips and accumulated $6.81 billion in revenue during its most recent quarter. In addition to adding to the business with Apple for the iPhone 6, Qualcomm is making a huge move into bringing sophisticated LTE connectivity to the automobile industry. The company is looking to employ a peer-to-peer (or car-to-car) communication technology that runs on Wi-Fi and is said to warn of possible collisions much better than radar technology.

Qualcomm investors receive a solid 2.25% dividend. The Cowen price target for this top-shelf tech stock is $85, and the consensus target is $83.86. Shares closed trading on Monday at $74.72.

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With multiple channels for business growth within the sector, and product refreshes constantly coming, the top stocks to buy at Cowen make good sense in a long-term aggressive growth portfolio.

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