10 Most Oversold S&P 500 Stocks in 2024

7) Microchip Technology Incorporated (NASDAQ:MCHP)

% Decline In 1 Year: ~30.9%

Number of Hedge Fund Holders: 37

Microchip Technology Incorporated (NASDAQ:MCHP) is engaged in the development, manufacture, and sale of smart, connected, and secure embedded control solutions. The company’s stock has witnessed a decline as a result of unfavourable revenue impacts due to severe inventory correction, which continued in most end markets. Furthermore, Microchip Technology Incorporated (NASDAQ:MCHP)’s stock has seen the brunt of a challenging period for the broader semiconductor industry, which witnessed headwinds due to supply chain disruptions and a shift in demand patterns.

Despite the near-term challenges, the company appears to be well-placed to benefit from several growth levers. Microchip Technology Incorporated (NASDAQ:MCHP)’s technology is well-placed in automotive and industrial markets, with positive trends likely to drive growth. The company’s strong position in microcontroller units (MCUs), field-programmable gate arrays (FPGAs), and analog products remains well in demand in such markets.  The automotive industry continues to see a significant transition transformation with the rise of EVs and advanced driver assistance systems (ADAS).

Notably, such trends need increasingly sophisticated semiconductor solutions, offering a significant growth opportunity for Microchip Technology Incorporated (NASDAQ:MCHP). Madison Investments, an investment advisor, released its Q4 2024 investor letter. Here is what the fund said:

“We didn’t make any new investments in the quarter, but added to two holdings: Microchip Technology Incorporated (NASDAQ:MCHP) and CDW. Microchip has been working through channel inventory adjustments and weak end market demand. Recently, the company’s Chairman (and previously long-time CEO) Steve Sanghi returned to the CEO role and has embarked on a plan to revitalize operations. New design activity and product releases have been strong across the portfolio, implying that the core innovation engine remains strong. Thus, we have full confidence that Steve need only to tweak some operational processes to re-position the company for success.”