10 Undervalued Semiconductor Stocks to Buy According to Analysts

1. Axcelis Technologies, Inc. (NASDAQ:ACLS)

Upside Potential: 66%

Fwd. PE: 12.2

Axcelis Technologies, Inc. (NASDAQ:ACLS) tops our list with a notably low forward P/E ratio of 12.2x. This semiconductor equipment company specializes in designing, manufacturing, and servicing ion implantation systems used in semiconductor chip fabrication. Recently, a Craig-Hallum analyst reiterated his Buy rating on Axcelis Technologies, Inc. (NASDAQ:ACLS) with a target price of $105. While he anticipates some market softness in the first half of the year, he expects demand to improve in consumer, automotive, and industrial end markets, which should benefit Axcelis Technologies, Inc. (NASDAQ:ACLS).

The company has projected that new interim final rules from the U.S. Department of Commerce Bureau of Industry and Security (BIS) regarding semiconductor equipment exports to China could potentially reduce its total annual revenue by $20 million to $50 million in 2025. Despite this near-term headwind, Axcelis Technologies, Inc. (NASDAQ:ACLS) has robust growth drivers to support its long-term trajectory. During the Q3 2024 call, management highlighted three key growth catalysts:

“We are well positioned as the market leader in implant for silicon carbide given the breadth of our portfolio and focused investments we’ve made in this market for several years. We remain very excited about the following long-term growth opportunities that lie ahead. First, continued growth in adoption of silicon carbide as a key enabler of electrification, power efficiency and decarbonization. Second, a cyclical recovery in our memory and general mature markets. And finally, penetration of the Japan market where we aim to extend the success we’ve made in Power to other markets within Japan.”

While we acknowledge the potential of ACLS to grow, our conviction lies in the belief that 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 ACLS 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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