In this article, we will look at the 10 Best Semiconductor Penny Stocks To Invest In Right Now.
One of the biggest news items from last month was that Trump wanted to kill the CHIPS Act. Why was it a huge scandal that the president threatened to “alter federal government contracts with chipmakers and slap new tariffs on the semiconductor industry”? The answer lies in analyzing the semiconductor space and appreciating just how much of an essential industry chipmaking has become.
Semiconductors, or chips, are the backbone of modern electronic devices. The materials and the accompanying technologies have become central to many industries, especially artificial intelligence (AI). They are especially critical in the current age of AI because they provide the necessary processing power for AI computations. As such, advances in semiconductor technology are the edge countries need to take the lead in the AI sector and other industries that rely on chips.
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That is why the Biden administration enacted the CHIPS and Science Act (CHIPS Act) on August 9, 2022. The primary objective of the Act is to boost domestic research and manufacturing of semiconductors. Put simply, the United States wants to onshore some of the chipmaking activity that has since been outsourced to places like Taiwan. Some of the goodies in the Act include subsidies, investment tax credits for chip manufacturing equipment, and $52.7 billion in funding for chipmakers that choose to set up shop in the US.
And the US is not alone. Just recently, Vietnam launched a national semiconductor strategy with a $500 million investment. The first major objective is to establish the country’s first semiconductor fabrication plant. Across several borders on Vietnam’s west is India working on advancing its semiconductor industry. Recently, the Indo-American Chamber of Commerce (IACC) and the US Consulate revealed plans to create a whitepaper that addresses “the needs of India’s domestic sector and incorporate perspectives from US stakeholders.” Many other countries are either working on a similar strategy or are already making investments in local chipmaking capacity.
Such government interest is one reason the semiconductor industry has gone crazy over the past few months. In 2024 alone, chipmakers reported $627 billion in revenues, much more than Deloitte had forecasted. With the growing interest in the industry by governments worldwide, one cannot disagree with Deloitte’s assessment that the sales momentum will carry on this year. In fact, Deloitte projects that semiconductor sales will hit $697 billion in 2025, and that the industry is on pace to record $1 trillion in sales by 2030.
The stock market’s performance confirms that investors are noting the optimism in the global semiconductor industry. The market cap of the top 10 global chip companies currently sits at $6.23 trillion. Although this is a few billions less than the market cap in December 2024 ($6.5 trillion), it is still many multiples higher than in 2023 and back.
But there is a problem. If Trump makes good on his promise to throw the spanner into the CHIPS Act’s works, the chaos that may ensue in the global semiconductor market may be catastrophic. What Vietnam or India do to boost their local sectors doesn’t matter because the US has insane leverage in this industry. And the biggest losers will be the industry giants. In fact, out of the top 10 global chip companies, only the shares of two have been in the green for the past 30 days. The other eight have lost substantial value.
This is where the case for semiconductor penny stocks makes sense. Some penny stocks can make gains of over 4,000% in a volatile environment, although they also carry significant risks. But volatility isn’t always a bad thing. According to Michael Saylor, “Volatility is a gift to the faithful. It scares away the tourist, it scares away the lazy, it scares away the people who are already conventionally rich and have all the money.”
In other words, if there was a time to tilt your portfolio to the semiconductor penny stock side, then that time is now. The primary reason is that any disturbance in the global chips supply chain will hit major players harder. Many smaller players are agile enough to navigate difficult situations better, and there is nothing investors love more than a stock that conserves value in a choppy market.
A technician using a microscope to inspect a complex semiconductor structure.
Our Methodology
To compile our list of the 10 Best Semiconductor Penny Stocks To Invest In Right Now, we used stock screeners to identify stocks trading under $5 (as of March 5). We focused on companies operating in two industries: Semiconductors and Semiconductor Equipment & Materials. From the resultant data, we ranked these companies based on institutional interest, as measured by the number of hedge funds holding positions in each stock at the end of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Semiconductor Penny Stocks To Invest In Right Now
10. SEALSQ Corp (NASDAQ:LAES)
Price as of March 5: $2.45
Number of Hedge Fund Holders In Q4 2024: 4
SEALSQ Corp (NASDAQ:LAES) develops and sells semiconductors, PKI, and post-quantum technology hardware and software products. The company creates security solutions that protect digital infrastructure against conventional and emerging quantum computing threats.
SEALSQ Corp (NASDAQ:LAES) reported a robust cash reserve that peaked at over $90 million in January 2025. In a recent letter to shareholders, CEO Carlos Moreira announced that the company has fully eliminated all convertible debt balances and warrants previously issued in conjunction with convertible debt. As such, they have a clean balance sheet with enhanced financial flexibility. Also, the company has built a strong sales opportunities pipeline valued at $93 million through the end of 2028, with over 40 opportunities specifically related to its TPM quantum-resistant technology.
The company has been actively expanding its technological capabilities and market reach. SEALSQ Corp (NASDAQ:LAES) recently entered into exclusive negotiations to acquire IC’Alps, an ASIC design and supply specialist based in France. The move will add approximately 100 highly-skilled staff and enhance the company’s ability to develop custom quantum-resistant secure chips.
Additionally, the company is collaborating with WISeSat to deploy ultra-secure, real-time IoT connectivity from space with post-quantum security. The next confirmed launch is set for June 2025 with SpaceX. These satellites will be equipped with post-quantum-ready security to safeguard against emerging cyber threats. SEALSQ Corp (NASDAQ:LAES) has positioned itself to benefit from the growing ASIC market, which is projected to expand from $23.13 billion in 2025 to $47.88 billion by 2034. This explains why the stock makes it to our list.
9. Mobix Labs Inc. (NASDAQ:MOBX)
Price as of March 5: $1.06
Number of Hedge Fund Holders In Q4 2024: 5
Mobix Labs Inc. (NASDAQ:MOBX) provides advanced wireless system and semiconductor solutions to customers worldwide, with a particular focus on North America. Some of the products in its lineup include connectivity technologies for aerospace, defense, and commercial applications.
Mobix Labs Inc. (NASDAQ:MOBX) delivered impressive financial results in Q1 2025, with revenues reaching $3.17 million. This revenue was up 7.3% from the previous quarter and exceeded the guidance provided in the prior earnings call. Even better, it represents an extraordinary 11-fold year-over-year increase. This performance marks the fifth consecutive quarter of growth for the company.
Early this year, Mobix Labs Inc. (NASDAQ:MOBX) announced agreements to acquire two defense-focused companies, Spacecraft Components Corp. and SCP Manufacturing, which are expected to close in Q2 2025. These acquisitions are expected to strengthen the company’s presence in aerospace and defense. Just weeks after the announcement, the company revealed that it had secured significant contracts with the US military, including supplying critical components for Apache and Chinook helicopters.
It was also recently awarded a US Defense Department grant to develop satellite communications technology in collaboration with the University of Massachusetts. The expanding defense industry footprint, strong revenue growth trajectory, and strategic acquisition strategy make the stock an ideal candidate in this list.
8. Sequans Communications S.A. (NYSE:SQNS)
Price as of March 5: $2.22
Number of Hedge Fund Holders In Q4 2024: 7
Sequans Communications S.A. (NYSE:SQNS) is a pioneer in cellular Internet of Things (IoT) technology and a leading provider of 4G/5G IoT semiconductor solutions. The company specializes in developing chips for cellular connectivity in IoT applications, with a focus on LTE-M and NB-IoT technologies.
Sequans Communications S.A. (NYSE:SQNS) posted robust growth in the full-year 2024 financial results, with total revenues increasing by 9% to $36.8 million. Some key highlights include the company’s successful completion of a $200 million deal with Qualcomm, which substantially improved its financial position. Fourth quarter performance was particularly strong, with revenues surging 130% year-over-year to $11 million, and product revenue doubling from the previous quarter to $4.7 million. This growth alone accounted for 43% of total revenues.
The company is already making moves in 2025. Sequans Communications S.A. (NYSE:SQNS) will unveil its next generation of cellular IoT semiconductors at Mobile World Congress 2025. It will introduce 5G eRedCap technology to address longevity challenges for IoT applications. Also, the company announced two new advanced chips added to its flagship product families: Calliope 3, which adds 5G NR RedCap to LTE Cat 1bis, offering longevity with improved data rates and robust connectivity; and Monarch 3, which adds 5G NR RedCap to LTE-M.
Additionally, Sequans Communications S.A. (NYSE:SQNS) is strategically positioned as a European semiconductor company amidst increasing restrictions on Chinese manufacturers. This, as well as a robust financial position, make the stock a deserving item in our list of the 10 Best Semiconductor Penny Stocks To Invest In Right Now.
7. Amtech Systems, Inc. (NASDAQ:ASYS)
Price as of March 5: $4.96
Number of Hedge Fund Holders In Q4 2024: 8
Amtech Systems, Inc. (NASDAQ:ASYS) manufactures equipment and consumables for semiconductor fabrication and packaging. Its products are used in fabricating semiconductor devices like silicon carbide (SiC).
On February 5, 2025, Amtech Systems, Inc. (NASDAQ:ASYS) reported financial results that exceeded the high end of management’s guidance. The net revenue came in at $24.4 million, a 1% increase from the previous quarter, though slightly down 2% from the same period last year. More impressively, the company reported GAAP net income of $0.3 million, or $0.02 per diluted share. This is a substantial improvement from the GAAP net loss of $0.5 million in the preceding quarter and the $9.4 million loss in the first quarter of fiscal 2024.
Operationally, the company is working on several angles to increase efficiency. It implemented several cost optimization initiatives, which resulted in a $1.8 million year-over-year increase in adjusted EBITDA. Also, Selling, General & Administrative expenses decreased by $0.7 million from the previous quarter and $0.5 million compared to the same period last year.
Management is convinced that the cost optimizations, coupled with strong long-term growth drivers like AI infrastructure investments will set the company on pace to create meaningful value for investors. This is why the stock is number 7 in our list of the 10 Best Semiconductor Penny Stocks To Invest In Right Now.
6. AXT, Inc. (NASDAQ:AXTI)
Price as of March 5: $1.57
Number of Hedge Fund Holders In Q4 2024: 13
AXT, Inc. (NASDAQ:AXTI) is among the leading companies creating the intermediate material used to create chips. The company develops and manufactures high-performance compound and single-element semiconductor substrate wafers.
AXT, Inc. (NASDAQ:AXTI) announced fourth quarter and full year 2024 results recently, and the numbers are rosy. The company experienced tremendous growth last year, with annual revenue reaching $99.4 million, a 31% increase from financial year 2023. There were also significant improvements in financial performance—non-GAAP gross profit jumped 21%, and non-GAAP net loss improved by 40%.
The said improvements didn’t come from thin air. The company has been aggressively pursuing a strategy to improve the quality of its products. According to Morris Young, the CEO:
“Over the last twelve months, we have aggressively advanced the technical specifications of our materials to help our global customer base solve complex, next-generation connectivity challenges. As such, 2024 marked a meaningful year of our revenue growth into the cloud and data center infrastructure market, as well as our successful penetration of the cell phone market.”
The cell phone market represents close to a $100 million addressable market, and the company hasn’t tapped it yet. This represents a massive opportunity for AXT, Inc. (NASDAQ:AXTI) to continue posting record figures. And this is why the stock deserves a spot on this list.
5. Navitas Semiconductor Corporation (NASDAQ:NVTS)
Price as of March 5: $2.63
Number of Hedge Fund Holders In Q4 2024: 13
Navitas Semiconductor Corporation (NASDAQ:NVTS) produces and sells silicon carbide technology and gallium nitride (GaN) power integrated circuits (ICs). The technology is used in high-efficiency and high-power density applications in areas such as mobile devices, electric vehicles, and data centers.
Despite an industry-wide slowdown in 2024, Navitas Semiconductor Corporation (NASDAQ:NVTS) posted record revenues from the mobile, consumer, and appliance sectors. Although the company did not provide the specific figure, its GaN revenue grew over 50% to reach a record high. The total revenue for the full year 2024 reached $83.3 million, a 5% increase from $79.5 million in 2023. The company ended the year with a strong balance sheet, reporting $86.7 million in cash and cash equivalents as of December 31, 2024.
One factor behind the company’s robust financial position is its aggressive push to expand its customer base. It closed the calendar year 2024 with $450 million in design wins, and the customer pipeline increased 92% from $1.25 billion in December 2023 to $2.4 billion in December 2024. AI-driven data center applications have emerged as the fastest-growing segment within the customer pipeline, now valued at $165 million.
The company has also announced plans to unveil breakthroughs in power conversion technology and GaN and SiC technologies during demonstrations this March 2025. For these reasons, the company secures the fifth position on our list.
4. Valens Semiconductor Ltd. (NYSE:VLN)
Price as of March 5: $2.18
Number of Hedge Fund Holders In Q4 2024: 15
Valens Semiconductor Ltd. (NYSE:VLN) is one of the major suppliers of connectivity solutions worldwide. It designs, manufactures, and sells chipsets for industrial machine vision, automotive solutions, and power extension technologies. The company’s products enable extending high-speed connections over standard cables at greater distances than typically possible.
On February 26, 2025, the company reported Q4 and full-year 2024 results. Revenues came in at $16.7 million, exceeding the top end of its guidance and marking the fourth consecutive quarter of revenue growth. This growth happened even though, according to the leadership, the year was quite challenging.
According to Gideon Ben-Zvi, Valens Semiconductor Ltd.’s (NYSE:VLN) CEO:
“2024 was a challenging year for many companies around the world, including semiconductor companies in many markets, and these challenges affected Valens as well. However, although our sales were slowed by continued inventory digestion and weakness in our customer markets, we believe that we are emerging from the bottom of the cycle, and that 2025 will prove a turnaround year for our company.”
Regardless, Valens Semiconductor Ltd. (NYSE:VLN) continues to make strategic moves to strengthen an already strong market position. The company recently secured “Alliance partner” status with Sennheiser, a partnership that will see Valens’ USB and power extension technology becoming an officially endorsed solution for Sennheiser’s TeamConnect Bar products. In the same month, Acroname, a Valens affiliate, launched a new USB3.2 switch extension solution with advanced power delivery. It combines the company’s HDBaseT and BrainStem technologies to address power delivery challenges in USB-extended systems.
3. GCT Semiconductor Holding, Inc. (NYSE:GCTS)
Price as of March 5: $1.90
Number of Hedge Fund Holders In Q4 2024: 17
GCT Semiconductor Holding, Inc. (NYSE:GCTS) designs and sells semiconductor chips. It outsources the chipmaking processes to various foundries in East Asia. The company focuses on 4G LTE and 5G chips, which enable connectivity for various commercial devices, including customer-premise equipment (CPEs), mobile hotspots, routers, machine-to-machine applications, and smartphones.
When releasing Q3 2024 financial results in November last year, John Schlaefer, the company’s CEO, promised that they’d not only continue to advance their 5G chipset development but also look for ways to drive sales demand. And the key strategy was to sign MOUs with global partners. In this light, the company recently signed a definitive agreement with a European tier-one wireless infrastructure and terminal provider to collaborate on developing Fixed Wireless Access (FWA) technology. The partnership is built around GCT’s 5G solutions, including modem chipset and RFIC, and it builds on a previous MOU signed in August 2024. The two companies expect that their coming together will enable the launch of FWA devices in the second half of 2025.
The company followed that MOU up with another agreement to collaborate with Globalstar, Inc. to develop two-way satellite messaging systems for Globalstar’s mobile devices and modules. This partnership will use GCT’s IoT chip GDM7243i for Globalstar’s RM200M product. Future products will utilize GCT’s 4G LTE chip GDM7243SL and 5G IoT-enabled chipset to support Globalstar’s satellite network. The company is positioning itself to become a major player in its niche, and 17 hedge funds believe the stock will benefit from this. This is why the company is in the top five of our list.
2. MagnaChip Semiconductor Corp (NYSE:MX)
Price as of March 5: $4.26
Number of Hedge Fund Holders In Q4 2024: 19
MagnaChip Semiconductor Corp (NYSE:MX) is a South Korean chipmaker that produces display driver integrated circuits (DDICs) and power semiconductors. The company primarily serves the automotive, consumer electronics, and industrial markets. It operates through two main business segments: Mixed-Signal Solutions (MSS) for display applications and Power Analog Solutions (PAS) for power management in various electronic devices.
The latest financial data indicates that the company’s consolidated revenue of $66.5 million (for Q3 2024) hit the high end of its guidance range. The standard product business revenue increased 25.9% from the previous quarter and 24% year-over-year. This growth was particularly strong in the MSS segment, which jumped 41.8% quarter-over-quarter. One of the key drivers of the growth that the company cited is the increased demand for products targeted at Chinese smartphone OEMs.
On the technology front, MagnaChip Semiconductor Corp (NYSE:MX) has been expanding production of its 7th generation MXT LV MOSFETs, which are based on the company’s Super Short Channel FET technology. The new improvements enable the components to significantly reduce the channel length between the source and drain during operation, resulting in better battery performance and efficiency in mobile devices. MXT LV MOSFET has been integrated into premium smartphone models from a major global manufacturer, with production growing approximately 120% in the first three quarters of 2024 compared to the same period in the previous year.
1. Indie Semiconductor Inc (NASDAQ:INDI)
Price as of March 5: $2.87
Number of Hedge Fund Holders In Q4 2024: 22
indie Semiconductor (NASDAQ:INDI) makes computer chips—and the supporting software—that power advanced driver assistance systems (ADAS), in-cabin user experience, and vehicle electrification applications. The company creates mixed-signal SoCs embedded in edge sensors that are used in Radar, LiDAR, Ultrasound, and Computer Vision applications.
indie Semiconductor (NASDAQ:INDI) recently made public its Q4 2024 financial results, which gives mixed signals. Revenue came in at $58.0 million, 7.5% higher than the previous quarter. However, the non-GAAP gross margin remained flat at 50.4%, and the operating loss (on a GAAP basis) was higher at $33.9 million compared to $21.6 million a year ago. The non-GAAP operating loss was $14.2 million, versus $2.4 million during the same period in the previous financial year.
But a look at the company’s business highlights provides a clue to the increased operational costs. indie secured two new design wins with OEMs in South Korea and China—front sensing and interior monitoring for the Korean OEM and multi-channel applications such as eMirror for the Chinese OEMs. The company also validated the performance of initial samples of its 120 GHz radar solution for in-cabin occupant monitoring. It also achieved ASIL-D certification (the highest level of functional safety) for its electrification ASIC.
To meet the increased demand, the company has added in-house photonics integration, packaging, and system test capabilities. This way, indie can offer customers complete photonics subsystems for rapid solution evaluation and production. The strategy strengthens the company’s position in the automotive sector, where the market for optical components alone is expected to reach $9.80 billion this year. This explains why the company tops our list of 10 best semiconductor penny stocks to invest in right now.
While we acknowledge the potential of indie Semiconductor (NASDAQ:INDI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than INDI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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