15 AI Stocks That Are On Sale

11. Veeco Instruments Inc. (NASDAQ:VECO)

Number of Hedge Fund Holders: 24

Expected Earnings Growth: 4.7%

P/E Ratio: 18.8

Veeco Instruments Inc. (NASDAQ:VECO) is a semiconductor materials and equipment company based in Plainview, New York. It manufactures and supports semiconductor and thin film process equipment to make electronic devices globally.

In the second quarter, Veeco Instruments Inc. (NASDAQ:VECO) management noted that the company’s semiconductor business has remained strong so far this year, particularly because of record laser annealing revenue. Revenue for the quarter overall came in at $176 million, up 9% year-over-year, with non-GAAP operating income coming in at $28 million.

Veeco Instruments Inc. (NASDAQ:VECO) is currently investing in core technologies to expand its served available market. In laser annealing, the company has the opportunity to grow its SAM from $600 million to over a billion dollars. This represents significant growth potential for this lesser-known company in the semiconductor space.

Artificial intelligence is also expected to significantly improve Veeco Instruments Inc.’s (NASDAQ:VECO) profitability. The company’s systems used in transistor formation are currently used for GPU and CPU production, and its systems support advanced packaging for AI by enabling flux clean of micro bumps at leading foundry and memory customers. Veeco Instruments Inc. (NASDAQ:VECO) also has a significant international presence, with operations in the Asia Pacific and China alongside the US and Europe. All these factors combined are helping the company gain a unique position to benefit from the AI boom, and yet the stock is still trading at a relatively cheap valuation.

Veeco Instruments Inc. (NASDAQ:VECO) was seen in the 13F holdings of 24 hedge funds in the second quarter, with a total stake value of $220.3 million.

Wasatch Global Investors mentioned Veeco Instruments Inc. (NASDAQ:VECO) in its second-quarter 2024 investor letter:

“Veeco Instruments Inc. (NASDAQ:VECO) was the top contributor to strategy performance during the second quarter. The company is a global capital-equipment supplier that designs and builds processing systems used to manufacture high-tech microelectronic devices including semiconductors, photonics, display technologies and power supplies. These devices are integral to applications like advanced computing, machine learning and AI. Veeco has exhibited solid fundamentals and a reasonable valuation for a few years. Going forward, we think the bipartisan CHIPS and Science Act will create an additional tailwind for Veeco, which is one of relatively few U.S. micro-cap companies involved in semiconductor manufacturing and AI.”