11 Best Semiconductor Equipment Stocks to Buy According to Analysts

6. FormFactor, Inc. (NASDAQ:FORM)

Average Upside Potential: ~65.3%

Number of Hedge Fund Holders: 26

FormFactor, Inc. (NASDAQ:FORM) is engaged in designing, developing, manufacturing, selling and supporting semiconductor probe card products. The company announced that, together with MBK Partners (the largest PE firm in North Asia), it is acquiring FICT Limited from Advantage Partners Inc. FICT has been providing the semiconductor test and high-performance computing industries with complex multi-layer organic substrates, printed circuit boards, and related leading-edge technologies and services. With the transaction, FormFactor, Inc. (NASDAQ: FORM) invests ~US$60 million into the consortium.

As per FormFactor, Inc. (NASDAQ:FORM)’s Chief Executive, the semiconductor industry’s rapidly accelerating adoption of advanced packaging needs higher investment and stronger collaboration throughout the test and assembly supply chain. Overall, the growth in the semiconductor market, mainly in domains including HBM fueled by Al, significantly aided FormFactor, Inc. (NASDAQ: FORM). Moving forward, its investments and emphasis on advanced testing solutions place it well to reap the benefits of emerging industry trends, fuelling strong growth in the broader semiconductor testing industry.

TimesSquare Capital Management, an equity investment management company, released its Q2 2024 investor letter. Here is what the fund said:

“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that closely tie to increasing shares of corporate IT budgets. FormFactor, Inc. (NASDAQ:FORM) offers probe cards to test semiconductors. Its shares jumped 33% on the combination of a solid quarter along with second quarter guidance well ahead of Street projections. This stems from high bandwidth memory (HBM) and as well as foundry & logic demand for probe cards. HBM is fueled by AI spending while foundry & logic is tied to new microprocessor design ramps.”