We recently compiled a list of the 10 Undervalued Chip Stocks Near 52-Week Lows. In this article, we are going to take a look at where Applied Materials, Inc. (NASDAQ:AMAT) stands against the other undervalued chip stocks.
Energy and EV stocks continue to be in focus as Donald Trump signs a bunch of executive orders that will have far-reaching impacts on many industries. He even revoked an executive order related to AI, though it addresses a matter that may not directly impact a company’s sales in the near term. AI stocks are going under the radar for a few weeks but with earnings season about to get into full gear, we may not have the same opportunities in a couple of weeks that we have now.
Many of the chip stocks continue to stay undervalued. The main reason is the lack of demand in the niche industries that these companies serve. But this demand will eventually shift at some point in 2025, which is what makes them so attractive to consider at this point.
We came up with 10 stocks that we believe are undervalued, near their 52-week lows, and present good investment opportunities. To come up with the 10 undervalued chip stocks that are near 52-week lows, we only considered stocks with a market cap of between $10 billion and $200 billion that hit their 52-week lows recently.
Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.
A technician in a clean room assembling a semiconductor chip using a microscope.
Applied Materials, Inc. (NASDAQ:AMAT)
Applied Material investors had a strange 2024. The stock shot up over 70% in the first half of the year and then lost it all by the end of December. The cyclicality of the sector was at play and investors didn’t like it one bit.
2025 has started on a brighter note though. The stock recently received an upgrade from KeyBanc analysts. The rating was upgraded from Sector Weight to Overweight while the price target was moved to $225. The bank stated improving investor expectations as one reason for the upgrade. The market conditions are also expected to ease off for some of the companies in the sector, and AMAT is one of those.
KeyBanc also expects 2025 wafer fabrication equipment spending to be up by 8% compared to the 2024 levels, reaching $108 billion. This sets up the company well for an impressive 2025, though investors would love to have reduced volatility this time around.
Overall AMAT ranks 8th on our list of the undervalued chip stocks near 52-week lows. While we acknowledge the potential of AMAT as a leading AI investment, 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 as promising as AMAT 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. This article was originally published at Insider Monkey.
