10 Most Oversold Data Center Stocks to Buy According to Analysts

1. Semtech Corp. (NASDAQ:SMTC)

YTD returns: -41%

Potential Upside: 85%

Number of Hedge Fund Holders: 57

Semtech Corporation (NASDAQ:SMTC) is a semiconductor company specializing in the design and manufacturing of high-performance analog and mixed-signal chips for data centers, IoT, and communications infrastructure. Its product portfolio includes optical networking chips, signal integrity solutions, and power management ICs, all aimed at enhancing data center efficiency and enabling high-speed connectivity.

After surging 182% in 2024, Semtech Corporation (NASDAQ:SMTC) has seen its stock decline by approximately 41% in 2025. The most significant drop occurred on Monday, February 10, when shares plummeted 43% following the company’s downward revision of its guidance for CopperEdge products. Previously, Semtech had projected net sales of at least $50 million from its CopperEdge solutions used in active copper cables but revised expectations downward due to changes in rack architecture by a major customer.

According to a MarketWatch report citing Benchmark analyst Cody Acree, that customer is believed to be Nvidia Corp. (NASDAQ:NVDA), which may be scaling back support for a particular server rack configuration amid the development of a new processing unit designed to address heating concerns. Despite the sharp stock decline, the analyst maintained a Buy rating, viewing the sell-off as an overreaction and considering ample opportunities in rest of the portfolio.

Several analysts continue to hold a favorable outlook on Semtech despite the Nvidia-related setback. B. Riley analyst Craig Ellis reaffirmed his Buy rating with a $68 price target, while Craig Hallum analyst Anthony Stoss also maintained a Buy rating, setting a target of $70. Market consensus still suggests a potential upside of 85%.

While we acknowledge the potential of SMTC to grow, 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 SMTC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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