We recently compiled a list of the 12 Small-Cap Semiconductor Stocks to Buy Now. In this article, we are going to take a look at where CEVA Inc. (NASDAQ:CEVA) stands against the other small-cap semiconductor stocks.
According to Deloitte’s 2025 global semiconductor industry outlook, released on February 4, 2025, the semiconductor industry is set for a much better 2025, with projected sales reaching $697 billion, representing an 11.2% year-over-year growth. This projection suggests the industry is on track to achieve the widely accepted goal of $1 trillion in sales by 2030. Deloitte analysts also highlight that “average” chip stock performance over the past two years has been a “tale of two markets”: Companies involved in the generative AI chip market have outperformed, while those in automotive, computer, smartphone, and communications semiconductors have lagged.
This growth story aligns with the significant expansion the semiconductor industry has experienced over the past decade, largely driven by advancements in artificial intelligence and high-performance computing. The entire supply chain, from lithography to equipment and packaging, has benefited from this surge, resulting in unprecedented demand for advanced semiconductors. While the majority of investments in these technologies have come from large-cap companies, small-cap companies are often leading the charge on the innovation front within the emerging technologies, and at the same time, offer diversification away from the crowded large-and-mega-cap stocks.
In November 2024, Francis Gannon, Co-chief Investment Officer at Royce Investment Partners, discussed his thesis on small-caps during an interview with Yahoo Finance. He noted that small-caps have been out of favor for an extended period, with the Russell 2000 reaching its peak three years ago and experiencing negative returns since then. Gannon believes the new Trump administration, reshoring efforts, leading innovation, and a favourable earnings season will significantly boost the small-cap companies, describing this shift as nothing short of a “revolution.”
In summary, semiconductors represent a long-term investment opportunity, with the small-cap segment garnering attention as a hot topic in recent months. Exciting return opportunities are anticipated in the coming years. With that, let’s explore the top 12 opportunities in the small-cap semiconductor space that we have identified for you.
Our Methodology
To identify the 12 small-cap semiconductor stocks to buy now, we screened U.S. listed semiconductor companies with a market capitalization between $300 million and $2 billion. The stocks were then arranged in ascending order of the number of hedge fund holders for each company, based on hedge fund data from Insider Monkey’s database as of Q3 2024.
Note: All pricing and market cap data is as of market close on February 7.
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 close-up of a digital signal processor, showing its exceptional processing capabilities.
CEVA Inc. (NASDAQ:CEVA)
Market Capitalization: $775 million
Number of Hedge Funds: 17
CEVA Inc. (NASDAQ:CEVA) delivers innovative silicon and software IP solutions, enabling smart edge products to connect, sense, and infer data with exceptional reliability and efficiency. The company boasts the industry’s only comprehensive portfolio of communications and scalable Edge AI IP, empowering connectivity, sensing, and inference in cutting-edge smart edge products across various sectors, including consumer IoT, mobile, automotive, infrastructure, industrial, and personal computing. With over 17 billion smart edge products powered by its technology, CEVA Inc. (NASDAQ:CEVA) is used in diverse applications such as AI-enhanced smartwatches, IoT devices, wearables, autonomous vehicles, and 5G mobile networks.
On January 6, 2025, MediaTek (a Taiwanese semiconductor company) and CEVA Inc. (NASDAQ:CEVA) announced a new partnership to enhance mobile entertainment with CEVA’s RealSpace Elevate multi-channel spatial audio solution, integrated into MediaTek’s Dimensity 9400 flagship 5G smartphone chip. This collaboration, revealed at CES 2025, leverages Bluetooth LE Audio for immersive audio experiences. The RealSpace Elevate solution offers head tracking and a three-dimensional sound environment, enriching music, movies, games, and calls. This partnership aims to provide high-quality audio that matches 4K visual clarity, with improved performance, AI, and battery life.
In November 2024, CEVA Inc. (NASDAQ:CEVA) reported its Q3 2024 results, with revenue of $27.2 million, reflecting a 13% year-over-year (YoY) increase. Licensing and related revenue rose 12% YoY to $15.6 million, while royalty revenue increased 15% to reach $11.6 million. CEVA-powered device shipments hit 522 million units, driven by record shipments of Bluetooth, Wi-Fi, and cellular IoT devices. The company signed 10 new IP licensing agreements in the quarter, including deals for 5G-Advanced satellite communications and spatial audio. Management also authorized the expansion of the share repurchase program by an additional 700,000 shares, bringing the total shares available for repurchase to approximately 1 million.
Overall CEVA ranks 8th on our list of the small-cap semiconductor stocks to buy. While we acknowledge the potential of CEVA as an investment, 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 CEVA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
