Sometimes when a rally gets hyper-extended, the last money in are retail dollars chasing the performance. In the case of the semiconductors, after an incredible 2017, that indeed may be the case. The key for investors is realizing that there is tremendous value in the sector and huge opportunity going forward. The trick for 2018 is more than just owning various companies. It is owning companies with a degree of value and solid upside potential.

A new report from the semiconductor crew at Deutsche Bank notes that the PHLX Semiconductor Sector (SOX) index rose a stunning 38% in 2017, almost twice the move of the S&P 500. The analysts cited rising average selling prices in memory, strong capital expenditures and very solid macro demand.

With the SOX index up yet again to start 2018, they are positive, but cautious, and here’s why:

When combined with the SOX already being ~43% above its 5yr avg relative to the S&P, we expect the outperformance in semi sector stocks to moderate, if not reverse, in 2018. Consequently, we believe semi investors should take an increasingly conservative posture, focusing on names with defensive attributes such as self-help-driven margin expansion potential and discount valuations.

The Deutsche Bank analysts have four Top Pick stocks to buy, and all make sense for aggressive growth accounts looking to add or increase semiconductor exposure.

Intel

This leader in semiconductors is working hard to scale away from dependence on personal computers, and the Internet of Things and data center cloud spending are a big part of the shift. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide. It operates through Client Computing Group, Data Center Group, Internet of Things Group, Software and Services, and All Other segments.

The company’s platforms are used in various computing applications comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.

Last year the company announced an agreement to buy Mobileye, a maker of automotive vision technology used for advanced driver assistance systems (ADAS) and fully autonomous vehicles. The deal sets up Intel as the premier provider of autonomous vehicle chip and machine-vision technology for the ADAS industry, which the company estimates will grow to $70 billion by 2030. Intel’s role in autonomous driving also involves processors that will be embedded in autonomous cars, as well as the computers within vehicles that process data from ADAS systems.

Intel investors are paid a solid 2.45% dividend. The Deutsche Bank price target for the stock is $50. The Wall Street consensus price objective is $46.84. The stock closed trading on Friday at $44.82 a share.

Maxim Integrated Products

This company supplies some chips to Samsung for the red-hot Galaxy line. Maxim Integrated Products Inc. (NASDAQ: MXIM) designs, develops, manufactures and markets various linear and mixed-signal integrated circuits worldwide. The company also provides a range of high-frequency process technologies and capabilities for use in custom designs. It primarily serves automotive, communications and data center, computing, consumer and industrial markets.

Regardless of which processor wins supremacy in the automotive segment over the next couple of years, Maxim stands poised to benefit with its Power Management and SERDES content as autonomous cars require leading power efficiency and data distribution. Moreover, the company should see a linear benefit with additional content needed for greater levels of autonomous-driving features in future generations of automobiles.

Deutsche Bank favors the stock as Maxim continues to generate significant cash and targets 80% payout ratio. The company’s dividend yield is near its five-year average, and the company has grown its dividend in each of the past six years. The favorable view is based on expectations of continued strong growth in automotive with solid double-digit year-over-year growth and continued strength in its industrial segment.

Maxim shareholders are paid a decent 2.55% dividend. Deutsche Bank has a $60 price objective for the shares, and the consensus price target is $54.23. The shares closed on Friday at $56.58 apiece.