The semiconductor industry has always been a battleground for technological development, though lately, it has turned into a full-scale battle. The US and China are not only vying to outpace each other in the race to achieve AI superiority but are also actively trying to slow each other down.
The US for instance has placed a number of export restrictions on global firms selling semiconductor technologies to China. Many leading US companies have had to deal with declining China sales as a result of these restrictions. On the other hand, China is trying its best to come up with technologies that compete with those in the US, despite restrictions.
The emergence of DeepSeek AI at the end of January was a wake-up call for the Americans, with China building its latest AI model for a fraction of the cost that the US counterparts spend on their models. While the validity of these claims is debatable, it does show how far China has come when it comes to competing with the US.
As a result of the DeepSeek AI announcement, many semiconductor stocks took a big hit. Two weeks later, some of the stocks started recovering and investors started feeling comfortable with the thought of continued technological dominance by the US. We therefore decided to look at the semi-stocks that were making a comeback from the DeepSeek dip.
To come up with the list of 15 semiconductor stocks making a comeback from DeepSeek AI dip, we only considered stocks with a market cap of at least $10 billion that beat the S&P 500 in the last 5 days of trading.
15. QUALCOMM Incorporated (NASDAQ:QCOM)
QUALCOMM Incorporated is the developer and marketer of foundational technologies for the telecom industry. The company operates in Qualcomm Technology Licensing (QTL), Qualcomm CDMA Technologies (QCT), and Qualcomm Strategic Initiatives (QSI). The stock is up 1.67% in the last 5 trading days against the S&P 500’s 1.13% gains.
Qualcomm was one of the few companies that responded to the DeepSeek AI developments officially. On the 11th of February, the company released a white paper detailing how it thinks the DeepSeek model could give rise to the demand for on-device AI chips. With cheaper and smaller models coming forth, on-device AI (as opposed to AI on the cloud) is becoming a reality and Qualcomm is set to benefit from it.
Exactly a year ago, Qualcomm released a similar blog post talking about the emergence of on-device AI once the AI data center infrastructure was built. Thanks to DeepSeek, we now realize that making smaller models that are derived from bigger models and designed to excel at specific tasks is where the future is. The commercialization of AI will happen through these mini-modals and the demand for on-device inference will be met by companies like Qualcomm.
14. ON Semiconductor Corporation (NASDAQ:ON)
ON Semiconductor Corporation is an intelligent sensing and power solutions provider that operates in the advanced solutions group, power solutions group, and intelligent sensing group. It provides module, analog, discrete, and integrated semiconductor products as well as single-photon detectors, and other products. The company’s stock is up 1.92% this week.
ON announced its quarterly earnings report on the 10th of February and the market did not like it one bit. The stock tanked after the announcement, mainly because of the first-quarter guidance. The company estimates an EPS of $0.5 in Q1, way below Wall Street’s estimate of $0.9. The revenue guidance at $1.4 billion at the midpoint also didn’t come anywhere close to the analyst forecast of $1.69 billion.
CEO Hassane El-Khoury was confident the company’s long-term strategy won’t be affected by the uncertainties in 2025:
While 2025 remains uncertain, we remain committed to our long-term strategy.
The firm’s long-term plans include the acquisition of Qorvo’s Silicon Carbide Junction Field Effect Transistor (SiC JFET). To put it simply, the tech provides improved transistors that can handle higher voltages and higher temperatures as well as switch faster. This is expected to add $1.3 billion to the company’s TAM while growing at 30% till 2030.
