In this article, we will discuss the 10 Most Undervalued Semiconductor Stocks to Buy Now.
Deloitte expects that the broader semiconductor industry saw a remarkable growth in 2024, with sales touching $627 billion, outpacing the previous forecasts. This momentum is projected to continue, with 2025 sales anticipated to touch $697 billion. This will be a new record and will keep the industry on track to reach $1 trillion in sales by 2030. On a broader perspective, this growth trajectory showcases a CAGR of 7.5%, potentially doubling to $2 trillion by 2040.
Semiconductor Trends to Watch Out For in 2025
As per Orbit & Skyline, a leading semiconductor services provider, the broader semiconductor industry is expected to see strong transformation by 2025, thanks to the advancements in technology, transition in market demands, and the requirement for sustainable practices. The semiconductors continue to play a key role in fueling innovations throughout various sectors, such as artificial intelligence (AI), the Internet of Things (IoT), and automotive technologies. Notably, AI and ML integration, growth in automotive semiconductors, edge computing, and advanced packaging technologies are some of the key trends that are expected to shape the semiconductor industry.
The demand for AI-driven semiconductors continues to increase, with companies accelerating to develop chips capable of handling complex AI workloads. Furthermore, Orbit & Skyline, while highlighting the comments from the Chief Executive of a leading semiconductor firm, mentioned that the rise of EVs and autonomous driving technologies continue to fuel the demand for automotive semiconductors.
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What’s In Store for Semiconductor Industry in 2025?
The semiconductor industry remains well-placed for a strong growth in 2025. As per Microchip USA, an expert component supplier, emerging technologies such as AI, hyperscale cloud computing, and autonomous vehicles continue to fuel demand for advanced chips and memory solutions. The rapid expansion of hyperscale data centers is expected to continue to fuel semiconductor demand. With higher reliance on cloud services, the infrastructure supporting such platforms needs innovation constantly. Therefore, advanced processors, custom silicon solutions, and high-capacity memory modules remain crucial for handling the robust workloads generated by cloud computing.
Microchip USA also highlighted that AI and cloud computing can be termed as “interdependent forces,” magnifying each other’s impact. While AI workloads need the scalability and computational power of the cloud, the cloud platforms continue to rely on AI to improve services and optimize operations. As a result, both technologies are at the forefront of the growth outlook for the semiconductor industry.
Amidst these favourable trends, we will now have a look at the 10 Most Undervalued Semiconductor Stocks to Buy Now.
Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.
Our Methodology
To list the 10 Most Undervalued Semiconductor Stocks to Buy Now, we used a screener to shortlist stocks that trade at a forward P/E of less than ~20x. Next, we filtered out the ones that were popular among hedge funds, as of Q4 2024. Finally, the stocks were arranged in ascending order of their hedge fund sentiment.
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 Most Undervalued Semiconductor Stocks to Buy Now
10. United Microelectronics Corporation (NYSE:UMC)
Forward P/E as of March 3: ~7.4x
Number of Hedge Fund Holders: 18
United Microelectronics Corporation (NYSE:UMC) operates as a semiconductor wafer foundry. The company’s Q4 2024 results met guidance, with wafer shipments and utilization slightly surpassing expectations. For FY 2024, revenue saw an increase of 4.4% YoY, thanks to the steady improvement in demand throughout communication, consumer, and computer segments. United Microelectronics Corporation (NYSE:UMC)’s 22/28nm portfolio was the largest contributor, with revenue rising 15% in 2024.
The customers continue to show healthy interest in migrating to its 22nm specialty platforms for next-generation networking and display driver applications, which provide substantial power savings and performance advantages over 28nm solutions. Entering 2025, the broader semiconductor market remains well-placed for another year of growth, courtesy of robust demand for Al servers and increased semiconductor content in smartphones, PCs, and other electronic devices. To capture the opportunities, United Microelectronics Corporation (NYSE:UMC) continues to make investments in technology innovation, developing industry-leading specialty solutions to capitalize on the next wave of system upgrades and remain at the forefront of the competition. United Microelectronics Corporation (NYSE:UMC)’s new Singapore Phase 3 fab is expected to enhance customers’ supply chain resilience, while the 12nm collaboration with its US partner can provide customers a migration path beyond 22nm.
9. Synaptics Incorporated (NASDAQ:SYNA)
Forward P/E as of March 3: ~14.8x
Number of Hedge Fund Holders: 27
Synaptics Incorporated (NASDAQ:SYNA) is engaged in developing, marketing, and selling semiconductor products. Analysts at Needham have reiterated their confidence in the company by maintaining a “Buy” rating and a price objective of $90.00. The firm’s analysts lauded the strategic initiatives and partnerships that were established during Hurlston’s leadership, which are expected to support Synaptics Incorporated (NASDAQ:SYNA)’s growth in the IoT space. Overall, the strong foundation placed by Hurlston and the current strategic direction are anticipated to remain intact, offering continuity and stability for the company and its stakeholders. Elsewhere, Mizuho provided the price objective of $90 on the company’s stock, while keeping an “Outperform” rating.
The firm noted the stabilization in revenue dynamics and the benefits from a licensing agreement with Broadcom. Synaptics Incorporated (NASDAQ:SYNA)’s strategic transaction with Broadcom further strengthens its Core IoT position. The agreement, together with its ongoing organic growth, strengthens the confidence in the company’s long-term growth potential. On a positive note, the company continues to see stable-to-improving trends in most of its end markets. Synaptics Incorporated (NASDAQ:SYNA)’s strong balance sheet and positive cash flow place it well to capitalize on organic and inorganic growth opportunities. Overall, the company’s emphasis on automotive technologies, and edge AI makes it a critical beneficiary of the broader growth in the semiconductor market.
8. Cirrus Logic, Inc. (NASDAQ:CRUS)
Forward P/E as of March 3: ~14.9x
Number of Hedge Fund Holders: 29
Cirrus Logic, Inc. (NASDAQ:CRUS) is a fabless semiconductor company, which is engaged in developing low-power high-precision mixed-signal processing solutions. Benchmark upgraded the company’s stock to “Buy” from “Hold” with the price objective of $125 after it reported a strong Q3 performance and provided a healthy upside to the Q4 outlook. The continued success of Cirrus Logic, Inc. (NASDAQ:CRUS)’s largest customer, Apple, together with ongoing content expansion opportunities, remains encouraging. Benchmark’s upgrade stems from the company’s continued progress on customer and end-market diversification. Elsewhere, Barclays analyst Tom O’Malley upped the company’s price objective to $115 from $105, keeping an “Equal Weight” rating.
In Q3 2025, Cirrus Logic, Inc. (NASDAQ:CRUS) saw revenues of $555.7 million. During the quarter, the company saw healthy demand for its smartphone audio components, which include its latest-generation custom boosted amplifier and first 22-nanometer smart codec. For Q4 2025, the company projects revenue in the range of $350 million – $410 million. Overall, the expansion of the semiconductor industry, thanks to AI, 5G, automotive, IoT and next-gen consumer electronics, is expected to fuel Cirrus Logic, Inc. (NASDAQ:CRUS)’s growth prospects. Given the compelling roadmap of products and a proven track record of execution, the company remains well-positioned to grow long-term shareholder value.
7. Skyworks Solutions, Inc. (NASDAQ:SWKS)
Forward P/E as of March 3: ~13.4x
Number of Hedge Fund Holders: 31
Skyworks Solutions, Inc. (NASDAQ:SWKS) is engaged in designing, developing, manufacturing, and marketing proprietary semiconductor products. The company kicked off the new fiscal year with healthy results, increasing revenue by 4% sequentially and exceeding the midpoint of guidance. Notably, in Q1 2025, the company saw revenues of $1.068 billion. Skyworks Solutions, Inc. (NASDAQ:SWKS) saw consistent improvement in demand indicators within Broad Markets, while it supported several new product launches in Mobile.
Additionally, the company saw another quarter of impressive FCF with margins surpassing 30%. Skyworks Solutions, Inc. (NASDAQ:SWKS) has expanded its design win pipeline in automotive with cellular connectivity and power management solutions. For the March quarter, the company projects revenue in the range of $935 million – $965 million, with non-GAAP diluted EPS of $1.20 at the mid-point of the revenue range. In broad markets, Skyworks Solutions, Inc. (NASDAQ:SWKS) anticipates additional sequential and YoY growth.
Overall, with the growth of the broader semiconductor industry due to 5G, automotive, IoT, and AI trends, the company is expected to capitalize on higher demand for RF and connectivity solutions. The expansion of 5G networks is expected to fuel increased demand for advanced RF front-end solutions, aiding Skyworks Solutions, Inc. (NASDAQ:SWKS).
6. Qorvo, Inc. (NASDAQ:QRVO)
Forward P/E as of March 3: ~12.2x
Number of Hedge Fund Holders: 37
Qorvo, Inc. (NASDAQ:QRVO) happens to be a critical player in the broader semiconductor market, which continues to benefit from 5G, automotive, IoT, defense, and AI-driven infrastructure growth. Piper Sandler upgraded the company’s stock from a “Neutral” rating to “Overweight.” The upgrade stems from the improved fundamentals at Qorvo, Inc. (NASDAQ:QRVO), thanks to the involvement of an activist investor, Starboard. Piper Sandler opines that Starboard possesses a strong history of effecting change in similar scenarios, focusing on fields including operational expense efficiencies, capital footprint efficiencies, and strategic divestitures.
Previously, Starboard has initiated activist campaigns at the 13 semiconductor companies, says CNBC. Starboard’s modus operandi in such situations revolves around taking board seats if necessary, instituting a philosophy of discipline resulting in more efficient SG&A and targeted R&D, and helping to improve operating margins, as per CNBC. Piper Sandler remains optimistic about the value creation, which can result from the activist’s involvement. The analysis hints at a significant opportunity for Qorvo, Inc. (NASDAQ:QRVO) to improve its operational efficiency and financial performance.
Investment management company Vulcan Value Partners recently released its Q4 2024 investor letter. Here is what the fund said:
“There were no material contributors to performance. There were three material detractors: Sdiptech AB, Qorvo Inc., and Elevance Health Inc. Qorvo, Inc. (NASDAQ:QRVO) is a leader in radio frequency (RF) systems and power management solutions primarily for mobile phones, wireless infrastructure, aerospace/defense, internet of things, and various other applications. Qorvo lowered near-term guidance largely due to accelerated weakness within its Chinese Android business as customers shifted from mid-tier phones, a market in which Qorvo participates, to entry level phones, a market where Qorvo does not participate. Qorvo continues to execute well in its other mobile markets including Apple and Android’s premium and flagship tiers. Importantly, management’s long-term revenue and margin targets, and confidence in achieving those targets, remain unchanged. We added to our position during the quarter.”
5. NXP Semiconductors N.V. (NASDAQ:NXPI)
Forward P/E as of March 3: ~17.9x
Number of Hedge Fund Holders: 44
NXP Semiconductors N.V. (NASDAQ:NXPI) provides various semiconductor products. Mizuho upped the company’s price target to $255 from $240, keeping an “Outperform” rating. The model has been updated post the earnings report and the firm continues to see NXP Semiconductors N.V. (NASDAQ:NXPI) as a leading automotive semiconductor supplier. As per the analyst, the company remains well-placed for a H2 2025 recovery in auto and industrials. The company managed to deliver resilient results throughout 2024, implying healthy execution, consistent gross margin, and strong FCF generation despite the challenging market environment.
Elsewhere, Citi analyst Christopher Danely upgraded the company’s stock to “Buy” from “Neutral,” providing a price objective of $290, up from $210. As per the analyst, the analog recovery is imminent. While there remains a downside from the automotive end market, the industrial end market is projected to recover, which is expected to partially offset it. For Q1 2025, on a GAAP basis, NXP Semiconductors N.V. (NASDAQ:NXPI) expects total revenue in the range of $2,725 million – $2,925 million. With the increase in demand for analog semiconductors, the company can witness higher sales volumes throughout its product portfolio. This increase in demand can result in higher capacity utilization in NXP Semiconductors N.V. (NASDAQ:NXPI)’s manufacturing facilities, fueling the margin expansion.
Sound Shore Management, an investment management firm, has released its investor letter for Q3 2024. Here is what the fund said:
“Meanwhile, detractors of note for the quarter were connected by a common theme: signs of a slowing economy. NXP Semiconductors N.V. (NASDAQ:NXPI), a leading chip maker for the auto industry, was lower on uncertain auto demand and package hauler FedEx lagged on muted volume trends. Importantly, both of these companies have ways to increase earnings outside of the business cycle, but are not entirely immune to the recent slowdown. Business cyclicality requires investor patience and a long-term perspective – we have both.”
4. ON Semiconductor Corporation (NASDAQ:ON)
Forward P/E as of March 3: ~18.4x
Number of Hedge Fund Holders: 52
ON Semiconductor Corporation (NASDAQ:ON) offers intelligent sensing and power solutions in the US and internationally. Allegro MicroSystems has been drawing takeover interest from the company, reported Bloomberg. Elsewhere, Mizuho analyst Vijay Rakesh has kept an “Outperform” rating on both Allegro MicroSystems and ON Semiconductor Corporation (NASDAQ:ON). Mizuho expects the potential deal to drive synergies and expand ON Semiconductor Corporation (NASDAQ:ON)’s robust portfolio through the addition of Allegro’s leading magnetic sensor portfolio.
Evercore ISI is also optimistic about the company considering its ongoing turnaround efforts and the potential for a strong revenue generation because of its Treo platform. The firm also expects an improvement in ON Semiconductor Corporation (NASDAQ:ON)’s gross margins, courtesy of a cyclical recovery, together with the reduction in supply chain inventories. Overall, Evercore ISI’s optimism stems from the company’s financial trajectory and strategic initiatives. The company remains focused on maintaining its financial discipline and streamlining its operations. Therefore, the broader growth of the semiconductor market hints at several opportunities for ON Semiconductor Corporation (NASDAQ:ON), mainly in sectors like industrial automation, energy-efficient solutions, 5G infrastructure and consumer electronics.
3. QUALCOMM Incorporated (NASDAQ:QCOM)
Forward P/E as of March 3: ~13.2x
Number of Hedge Fund Holders: 79
QUALCOMM Incorporated (NASDAQ:QCOM) is engaged in the development and commercialization of foundational technologies for the wireless industry. The company’s healthy position in 5G technology offers a strong foundation for future growth. With 5G networks expanding globally, demand for QUALCOMM Incorporated (NASDAQ:QCOM)’s modem and RF front-end solutions is expected to remain strong. Its technological leadership can enable it to maintain a healthy market position amidst higher competition.
The automotive sector demonstrates a promising growth opportunity for QUALCOMM Incorporated (NASDAQ:QCOM). The higher integration of advanced connectivity and computing capabilities in vehicles remains in line with the company’s expertise. Furthermore, QUALCOMM Incorporated (NASDAQ:QCOM)’s efforts in edge AI technology can help open new opportunities in various markets, such as automotive, industrial IoT, and smart cities. Its ability to leverage the expertise throughout multiple segments can create synergies and fuel growth. Qualcomm Technologies, Inc. announced the next evolution of the Qualcomm AwareTM Platform, which is a cloud-based services platform enabling companies to add observability, monitoring, and location capabilities to intelligently connected devices throughout industries, such as logistics, retail, and energy, among others.
Overall, as the broader semiconductor industry witnesses growth due to 5G, AI, automotive and IoT, QUALCOMM Incorporated (NASDAQ:QCOM) remains well-placed to benefit from chip sales and licensing revenue. Madison Investments, an investment advisor, published its Q3 2024 investor letter. Here is what the fund said:
“Alphabet Inc., Eli Lilly and Company, QUALCOMM Incorporated (NASDAQ:QCOM), Microsoft Corporation, and Apple Inc. were the largest detractors. Qualcomm has given back some of its first half gains after the CFO commented at a conference that its entrance into the AI PC business would take time to ramp. We continue to see Qualcomm as well positioned with growth from AI moving into the mobile phone, from new opportunities in the Internet of Things (IoT), and within the Auto industry but will also look to future growth as they enter the PC market.”
2. Micron Technology, Inc. (NASDAQ:MU)
Forward P/E as of March 3: ~12.7x
Number of Hedge Fund Holders: 94
Micron Technology, Inc. (NASDAQ:MU) is engaged in designing, developing, manufacturing, and selling memory and storage products. UBS analyst Timothy Arcuri reiterated a “Buy” rating on the company’s stock, maintaining a price objective of $125.00. The rating was followed by several industry checks on pricing, resulting in adjustments in the model. Amidst near-term inventory challenges, the analyst expects a return to modest undersupply in the DRAM market by Q4 2025 and into CY 2026. The analyst expressed confidence in Micron Technology, Inc. (NASDAQ:MU)’s High Bandwidth Memory (HBM) roadmap.
Furthermore, the company’s broader narrative remains unchanged. As per the analyst, Micron Technology, Inc. (NASDAQ:MU) has managed to establish a leading position in technology, and the progression of its HBM technology continues to divert wafers from conventional PC and smartphone memory markets. The company’s leadership in HBM technology places it well for significant long-term growth and profitability. Therefore, the broader semiconductor market continues to witness higher demand for memory and storage solutions, thanks to the advancements in technologies such as Al, cloud computing, 5G networks, IoT and data centers. Micron Technology, Inc. (NASDAQ:MU), considering its leading market position, remains well-positioned to reap the benefits of these elevated demand trends.
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Forward P/E as of March 3: ~19.4x
Number of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is engaged in manufacturing, packaging, testing, and selling integrated circuits and other semiconductor devices. The company announced its intention to expand its investment in advanced semiconductor manufacturing in the US by an additional $100 billion. Building on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s ongoing $65 billion investment in its advanced semiconductor manufacturing operations in Phoenix, Arizona, the company’s total investment in the U.S. is projected to reach US$165 billion. The expansion consists of plans for 3 new fabrication plants, 2 advanced packaging facilities, and a major R&D team center, strengthening the project as the largest single foreign direct investment in US history.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s business in Q4 2024 was aided by robust demand for its industry-leading 3nm and 5nm technologies. Moving into Q1 2025, the company’s business might be impacted by smartphone seasonality, which is expected to be partially offset by continued growth in AI-related demand. For Q1 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) expects revenue in the range of US$25.0 billion – US$25.8 billion. Overall, the company’s continued leadership in advanced manufacturing processes places it well for healthy future growth.
Wedgewood Partners, an investment management company, published its Q4 2024 investor letter. Here is what the fund said:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was another top contributor to performance during the quarter and for the year. The Company’s earnings growth dramatically accelerated compared to last year as the Company’s wafer fabrication and packaging volumes soared in 2024. In addition, the Company customer prices rebounded in the face of more normalized capital expenditures. The Company maintains a near-monopoly in the fabrication of nearly every new AI accelerator brought to market over the past two years. They continue investing tens of billions to build and 7ill future capacity with orders for what seems to be insatiable hyperscale demand for accelerated computing. The stock ended the year trading at a consensus forward earnings multiple that is several points lower than large cap growth benchmarks, despite the Company’s dominant position in the most important industry that is driving one of the largest technological shifts in a generation.”
While we acknowledge the potential of TSM as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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