In this article, we discuss the 10 semiconductor stocks to buy under $50. You can skip our comprehensive analysis of the semiconductor industry, and go directly to 5 Semiconductor Stocks to Buy Under $50.
Semiconductor chips power every smart device we can think of — from smartphones and laptops to LEDs and car infotainment systems. Therefore, it only makes sense that the industry around this digital-age commodity would be receiving billions of dollars in investment to cope up with the ever-increasing demand. In February, the US government passed the America Competes Act, which is an attempt to boost the semiconductor industry in America and invest in scientific research and development. $52 billion of American taxpayer money will be used for this critical purpose.
Semiconductor Industry Outlook for 2022
In 2022, semiconductor sales are expected to exceed $600 billion for the first time ever, according to the World Semiconductor Trade Statistics. Even though 2021 was a year of chip shortages amid grueling supply chain issues, the semiconductor industry grew 26% in the year. All of this goes to show the dependence of the digital world, and that of its future evolution, on the semiconductor industry.
Therefore, it would be wise to know which names in the market are ones worth buying, and which are worth buying cheap. Some of the top semiconductor companies include Intel Corporation (NASDAQ:INTC), Amkor Technology, Inc. (NASDAQ:AMKR), Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA).
Let’s now take a look at the best semiconductor stocks to buy under $50.
Photo by Slejven Djurakovic on Unsplash
Our Methodology
We picked semiconductor stocks that received positive analyst ratings, had solid business fundamentals, and boasted long-term growth potential. Hedge fund sentiment around each stock is derived from Insider Monkey’s database of 924 elite hedge funds and is given to provide readers with an understanding of investor confidence.
10 Semiconductor Stocks to Buy Under $50
10. Pixelworks, Inc. (NASDAQ:PXLW)
Number of Hedge Fund Holders: 15
Share Price (as of March 1): $3.15
Starting off our list is Pixelworks, Inc. (NASDAQ:PXLW), a maker of semiconductors and software solutions used in smartphones, tablets, and projectors. Its list of many clients includes OnePlus, a Chinese smartphone giant which uses the firm’s Pro Software solution in its OnePlus 10 Pro smartphone to enhance color accuracy. The iQOO 9 series smartphone by phone-maker Vivo has also incorporated the Pixelworks X5 Pro visual processor, which is designed to enhance users’ competence during heavy smartphone games.
On January 18, Colliers analyst Derek Soderberg upgraded Pixelworks, Inc. (NASDAQ:PXLW) to ‘Buy’ from ‘Neutral’ and set a $5 price target. Soderberg sees the firm’s position in 2022 as ‘too good to ignore’, and believes that a more favorable supply chain environment will boost its mobile business, whilst allowing an accelerated recovery for its projector business, which had suffered during the pandemic.
The fourth quarter’s EPS for Pixelworks, Inc. (NASDAQ:PXLW) was recorded at -$0.03, above estimates by $0.02. Quarterly revenue also outperformed estimates by $113,000, coming in at $16.59 million.
Hedge fund sentiment was up on Pixelworks, Inc. (NASDAQ:PXLW) at the close of the fourth quarter, where 15 hedge funds held stakes in the firm, as compared to 12 hedge funds in the preceding quarter. Millennium Management of Israel Englander was a leading shareholder in Pixelworks, Inc. (NASDAQ:PXLW) during Q4 2021, holding 1.68 million shares worth $7.4 million.
In addition to Intel Corporation (NASDAQ:INTC), Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA), Pixelworks, Inc. (NASDAQ:PXLW) is a top semiconductor stock to buy.
9. Sequans Communications S.A. (NYSE:SQNS)
Number of Hedge Fund Holders: 9
Share Price (as of March 1): $3.69
Sequans Communications S.A. (NYSE:SQNS) is next up on our list of the best semiconductor stocks to buy under $50. The firm offers 5G and 4G semiconductor chips, as well as modules for non-smartphone devices for the broadband and Internet of Things (IoT) markets around the world. It is based in Paris, France.
On February 16, B. Riley analyst Craig Ellis maintained a ‘Buy’ rating on Sequans Communications S.A. (NYSE:SQNS) shares and lowered the price target to $8 from $11. Ellis attributed the price target reduction to multiple compression and sees the firm has an 88% potential upside.
Reporting its fourth-quarter earnings on February 8, Sequans Communications S.A. (NYSE:SQNS) posted an EPS of -$0.09, which was in line with estimates. Revenue of $13.81 million for the quarter was also above analysts’ forecasts by $119,000.
Sequans Communications S.A. (NYSE:SQNS) recently announced the expansion of its existing 4G/5G licensing agreements with Renesas Electronics Corporation (OTCPK:RNECY). This deal will allow Sequans’ to boost its addressable market to India with its Monarch 2 and Taurus 5G platforms.
As of the fourth quarter, 9 out of 924 elite funds tracked by Insider Monkey held stakes in Sequans Communications S.A. (NYSE:SQNS), with a combined value of $50.34 million. The same number of hedge funds were bullish on the company in the preceding quarter. Of these 9 hedge funds, Lynrock Lake was the top shareholder of Sequans Communications S.A. (NYSE:SQNS) in Q4 2021, with 4.48 million shares valued at $21.25 million, signaling a 9% increase in holding from the previous quarter.
Investment firm Roubaix Capital LLC mentioned Sequans Communications S.A. (NYSE:SQNS) in its Q4 2020 investor letter, stating:
“As was the case during 2020, we expect our returns to be driven by the breadth of our positions. While Anterix offers a unique investment that will benefit primarily from utilities creating private high speed data networks, demand for high speed data is clearly a much larger, and dare say ubiquitous, trend that will be evident in the years ahead. There are many ways to invest behind this, but in small cap equities we see Sequans (SQNS) as a particularly strong beneficiary. For years, the company has focused on developing the semiconductor technology that is uniquely suited to enabling these networks. Specifically, Sequans chips use less power and are lower cost, two basic parameters that differentiate their products from more expensive and power-hungry chip architecture that is rooted in the current PC and handset markets. The end markets Sequans is focused on are expected to grow over 40% and the company anticipates rising market share. The company’s growth this year will take profitability to break-even levels and they see a roadmap to over 20% operating margins as revenues scale over the medium term. The company’s goals would imply an earnings rate nearing $1.00 in 2023, which, if achieved, would drive the stock materially higher.”
8. Valens Semiconductor Ltd. (NYSE:VLN)
Number of Hedge Fund Holders: 2
Share Price (as of March 1): $6.41
Valens Semiconductor Ltd. (NYSE:VLN) is an Israeli firm that deals in semiconductor products, including transmitters and receivers, that allow high-speed video and data transmission, and are used in the audio-video and automotive industries.
In November last year, BofA analyst Vivek Arya initiated coverage of Valens Semiconductor Ltd. (NYSE:VLN) with a ‘Buy’ rating and price target of $12. Arya holds that the firm’s connectivity chips operate in a market worth $9 billion and that it is a leader and an early-mover in the latest MIPI A-PHY standard used for connectivity in autonomous driving systems, in-vehicle infotainment, and advanced driver assistance systems. Arya also expects Valens Semiconductor Ltd. (NYSE:VLN) to post a 40% compound annual growth rate (CAGR) in sales from 2021 to 2024, on the back of 10x growth in auto sales.
In January, Valens Semiconductor Ltd. (NYSE:VLN) announced a partnership with Stoneridge (SRI) to introduce connectivity solutions to address safety issues for trucks and trailers. This includes vision and safety systems for the trucking industry. Since 2020, both firms have been working towards building a long-reach connectivity solution that delivers high quality, zero-latency, error-free video.
Out of all the hedge funds tracked by Insider Monkey, 2 were long Valens Semiconductor Ltd. (NYSE:VLN) in the fourth quarter, the same number as the quarter before.
7. Amtech Systems, Inc. (NASDAQ:ASYS)
Number of Hedge Fund Holders: 9
Share Price (as of March 1): $9.91
Amtech Systems, Inc. (NASDAQ:ASYS) makes equipment and tools used in the semiconductor and automotive industries, including silicon wafers, silicon carbide (SiC), sapphire substrates, high-temp belt furnaces, and various glass and silica components. These products are also used in developing electronic assemblies, and light-emitting diodes (LEDs).
On February 15, Cowen analyst Jeffrey Osborne maintained an ‘Outperform’ rating on Amtech Systems, Inc. (NASDAQ:ASYS) shares, and revised the price target to $16 from $17, noting that growing adoption of electric vehicles has been increasing demand across the firm’s product lines.
Amtech Systems, Inc.’s (NASDAQ:ASYS) EPS for the fourth quarter stood at $0.07, in line with consensus estimates. The firm raked in $27.33 million in revenue for Q4, beating analysts’ forecasts by $2.86 million.
Out of the 924 hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 9 were bullish on Amtech Systems, Inc. (NASDAQ:ASYS), with combined holdings of $38.3 million. This is the same number of hedge funds as the quarter before. Brian Olson held the biggest stake in Amtech Systems, Inc. (NASDAQ:ASYS) in Q4 2021, comprising 2.25 million shares worth $22.23 million.
6. Himax Technologies, Inc. (NASDAQ:HIMX)
Number of Hedge Fund Holders: 20
Share Price (as of March 1): $11.04
Himax Technologies, Inc. (NASDAQ:HIMX) provides semiconductor products related to display imaging processing technologies. Products by Himax Technologies, Inc. (NASDAQ:HIMX) are used in a range of end markets, including smartphones, TVs, car navigation systems, and virtual reality (VR) headsets.
Automotive sales were an excellent driver of growth for Himax Technologies, Inc. (NASDAQ:HIMX), posting a 110% increase in 2021, and with this revenue set to double in 2022. Himax Technologies, Inc. (NASDAQ:HIMX) also commands a 40% share of the global automobile display-driver market, making it perfectly poised to enjoy future growth as more cars around the globe adapt touch-display screens.
Himax Technologies, Inc. (NASDAQ:HIMX) posted fourth-quarter revenue of $452 million, which showed a 64% increase from the year-ago period. EPS for Q4 stood at $0.85, beating analysts’ forecasts by $0.06. The company’s segments for smartphones and tablets generated a collective revenue of $177 million in Q4, showing 30% year-on-year growth in revenue. This was despite chip shortages which led to products being delivered only to select smartphone customers. Himax Technologies, Inc. (NASDAQ:HIMX) controlled an impressive 35% of the market for tablet display drivers in Q4 2021, and its market share for LCD smartphone displays came in at 9%.
Investors were keen on the potential of Himax Technologies, Inc. (NASDAQ:HIMX) in the fourth quarter of 2021, with 20 hedge funds long on the company shares, in comparison to 18 hedge funds in the preceding quarter. Yiheng Capital held the biggest stake in Himax Technologies, Inc. (NASDAQ:HIMX), with 8.9 million shares worth $142.42 million
Along with Intel Corporation (NASDAQ:INTC), Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA), Himax Technologies, Inc. (NASDAQ:HIMX) is a semiconductor stock on the radar of investors.
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Disclosure. None. 10 Semiconductor Stocks to Buy Under $50 is originally published on Insider Monkey.
