10 Small Publicly Traded Semiconductor Companies To Buy

1. Semtech Corporation (NASDAQ:SMTC)

Number of Hedge Fund Investors In Q1 2024: 33

Semtech Corporation (NASDAQ:SMTC) is a small but diversified semiconductor company that sells signals management products, integrated circuits used in data centers, and power protection chips. The product diversification means that Semtech Corporation (NASDAQ:SMTC) can continue to grow revenue if one segment continues to perform but others are disappointing. This trend was evident during the firm’s first quarter of fiscal 2025 results. These saw Semtech Corporation (NASDAQ:SMTC)’s data center revenue grow by 61% annually as the growth in AI orders translated well for a firm whose overall revenue grew by 44% annually to $206 million. Semtech Corporation (NASDAQ:SMTC) also seems to be laser focused on data centers, and a potential recovery in telecommunications, as its new CEO who took over in June 2024 has extensive experience in the industry.

Semtech Corporation (NASDAQ:SMTC)’s management commented on the AI trends that benefited the firm and the telecommunications opportunities ahead of it during the latest quarter at the earnings call. According to the firm:

In hyperscale data center applications, net sales more than doubled over last year with powerful secular trends in AI continuing to support our copper and optical portfolios. We believe AI is a trailblazer, which facilitates accelerated adoption of leading-edge technologies such as active copper cables, linear pluggable optics, and 1.6T optical modules in general compute applications. For our copper edge linear redrivers, our expectations for timing and market opportunity in 1.6T active copper cables remain consistent with last quarter. We are closely collaborating in the qualification process, which is largely progressing to plan. While qualifications are currently ongoing, cable suppliers have received purchase orders for designs specifying our chips, which we believe to be a good indication of progress.

While SMTC might be a small publicly traded semiconductor industry looking to tackle mega trends, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None.