We recently published a list of 10 Most Oversold Semiconductor Stocks in 2024. In this article, we are going to take a look at where Aehr Test Systems, Inc. (NASDAQ:AEHR) stands against other most oversold semiconductor stocks in 2024.
The semiconductor industry is a crucial pillar of global technological development, providing essential components for various industries, from consumer electronics to industrial automation. Despite its long-term growth potential and innovation, several semiconductor companies underperformed significantly in 2024. These companies were impacted by internal and external factors such as geopolitical tensions and changing regulatory landscapes. For 2024, even the broader Philadelphia Semiconductor Index (SOX), which tracks the performance of the largest U.S.-traded semiconductor companies, returned 19.2%, lagging behind the S&P 500 Index’s 23% return.
In a mid-2024 CNBC interview, Stacey Rasgon, Managing Director at Bernstein Research, highlighted that U.S. semiconductor companies are at a disadvantage due to these restrictions, potentially limiting their growth and competitiveness in the global market. He also attributed uncertainties in Taiwanese businesses to comments from Mr. Trump, the then-presidential candidate, regarding Taiwan.
Certain sectors within the semiconductor industry also faced weaker-than-expected demand in 2024, particularly in consumer electronics and traditional automotive sectors. Despite strong growth prospects in AI, data centers, and automotive technologies, companies more exposed to legacy industries experienced slower demand, leading to weaker earnings. Deloitte’s 2025 global semiconductor industry outlook described this as a “tale of two markets”: companies in the generative AI chip market outperformed, while those without exposure (such as automotive, computer, smartphone, and communications semiconductor companies) underperformed.
While the long-term outlook for the semiconductor sector remains positive, short-term volatility and external challenges are creating headwinds for many companies. Companies most exposed to geopolitical tensions, regulatory shifts, and supply chain issues are likely to experience continued underperformance.
Our Methodology
To determine the 10 most oversold semiconductor stocks in 2024, we began by shortlisting all U.S.-listed semiconductor companies with a current market price of over $10 to avoid penny stocks. From these stocks we filtered the stocks which posted negative returns in 2024. We then ranked the bottom 10 companies in descending order based on their 2024 performance. Additionally, we included data on hedge fund holdings in these companies as of Q4 2024 to provide further insight into investor interest.
Note: All pricing data is as of market close on February 19.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician overlooking a circuit board being built and tested for a semiconductor device.
Aehr Test Systems, Inc. (NASDAQ:AEHR)
Share price return in 2024: -33%
Number of Hedge Fund Holders: 15
Aehr Test Systems, Inc. (NASDAQ:AEHR) provides advanced solutions for testing, burning-in, and stabilizing semiconductor devices in wafer level, singulated die, and package part form. The company’s focus includes high-performance semiconductor devices for applications such as electric vehicles, EV charging infrastructure, solar and wind power, computing, data and telecommunications infrastructure, and solid-state memory storage.
Aehr Test Systems, Inc. (NASDAQ:AEHR) experienced considerable volatility in its share price throughout 2024. The year began with a share price of $24.95, which plummeted by 40% in January alone, reaching $14.7. This decline was primarily due to a weaker outlook, as the company reduced its 2024 revenue guidance from at least $100 million to a range of $75 million to $85 million. Management also observed that the slowing growth in the electric vehicle market appeared to be negatively affecting the timing of both current and new customer orders, as well as planned capacity increases for silicon carbide devices. The share price dropped another 30% by mid-April, touching the year’s low of around $10.3. For the rest of the year, the share price fluctuated widely between $20.6 and $10, ending the year at $16.6.
In 2025, Aehr Test Systems, Inc. (NASDAQ:AEHR) saw its share price further decline by 25%, mainly because of the Q2 FY 2025 results that fell short of street expectations. Notwithstanding, an analyst from Craig Hallum lowered his price target on the shares to $19 from $25, yet maintained his Buy rating, encouraged by the company’s execution and reiteration of full-year guidance.
Overall, AEHR ranks 6th on our list of most oversold semiconductor stocks in 2024. While we acknowledge the potential of AEHR to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AEHR 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 is originally published at Insider Monkey.
