We recently published a list of the 11 Best Semiconductor Equipment Stocks to Buy According to Analysts. In this article, we are going to take a look at where Entegris, Inc. (NASDAQ:ENTG) stands against other best semiconductor equipment stocks to buy according to analysts.
As per Straits Research, the US semiconductor manufacturing equipment market size was pegged at US$13.2 billion in 2024. It is expected to grow from US$13.5 billion in 2025 to US$16.5 billion by 2033. This growth is expected to stem from increasing investments in domestic semiconductor manufacturing and the higher demand for advanced semiconductors in critical sectors, including artificial intelligence (AI), 5G, and EVs.
Market Drivers for Semiconductor Manufacturing Equipment
Straits Research highlighted that the resurgence of semiconductor manufacturing in the US is aided by the government initiatives. The federal push is targeted at reducing the dependency on Asian imports as well as strengthening the domestic supply chains. Leading companies continue to establish new fabs in the US, which helps create demand for advanced wafer manufacturing and fabrication equipment. Overall, the increased requirement for high-performance chips in sectors including defense, telecommunications, and automotive further cements the growth of semiconductor equipment.
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Growth Opportunities for Semiconductor Equipment
The rapid adoption of AI and 5G technologies in the United States continues to present strong opportunities for the broader semiconductor manufacturing equipment market, highlighted Straits Research. AI chips, primarily the ones utilized in data centers and autonomous vehicles, need advanced manufacturing techniques, fueling demand for cutting-edge equipment. Furthermore, the launch of 5G networks has been driving rapid production of semiconductors, which are capable of handling higher data transmission rates, further enhancing the need for advanced fabrication technology. The US is well-placed as a leader in AI and 5G development, with leading companies driving innovation, demonstrating strong growth potential.
KPMG believes that Al is now the most important application fueling semiconductor companies’ revenue as businesses continue to incorporate the technology in their digital transformations. As a result, the spending on Al semiconductors is projected to be $174 billion in 2025, which is expected to increase to $280 billion in 2028. KPMG also highlighted that semiconductor leaders opine that Al enablers (which include high-bandwidth memory) are the production technology that can have an impact on the broader industry over the upcoming 3 years. In an era in which Al applications are present in all the industries – ranging from autonomous vehicles to healthcare diagnostics, household devices to personalized recommendations—there remains a higher demand for semiconductors aiding Al capabilities.
Our Methodology
To list the 11 Best Semiconductor Equipment Stocks to Buy According to Analysts, we used a screener to shortlist the companies catering to the broader semiconductor equipment market. Next, we filtered out the stocks that analysts see significant upside to. The stocks are arranged in ascending order of their average upside potential, as of April 9. We also mentioned the hedge fund sentiments around each stock, as of Q4 2024.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician in a specialized cleanroom suit, preparing a microcontamination control pipeline.
Entegris, Inc. (NASDAQ:ENTG)
Average Upside Potential: ~86.4%
Number of Hedge Fund Holders: 47
Entegris, Inc. (NASDAQ:ENTG) offers advanced materials and process solutions for the semiconductor and other high-tech industries. Fitch Ratings believes that the company remains well-placed to maintain a key role in the broader semiconductor market with the increased complexity of architectures. Entegris, Inc. (NASDAQ:ENTG)’s customer relationships and collaboration offer expansion opportunities, with increased AI and machine learning requirements affecting the semiconductor market growth.
Elsewhere, Citi believes that the expected outperformance in 2025 can be fueled by node transitions in advanced logic and 3D NAND technologies, together with strong growth in advanced packaging. Entegris, Inc. (NASDAQ:ENTG) remains confident in the healthy long-term growth outlook of the broader semiconductor industry. The industry’s technology roadmaps remain opportunity-rich for the company as its customers drive for more complex device architectures and further miniaturization. Therefore, the resulting process complexity continues to make Entegris, Inc. (NASDAQ:ENTG)’s expertise in materials science and materials purity increasingly valuable, placing it well for the upcoming technology node transitions.
The London Company, an investment management company, released a Q4 2024 investor letter. Here is what the fund said:
“Entegris, Inc. (NASDAQ:ENTG) – ENTG underperformed during 4Q due to a more sluggish market recovery, particularly in mainstream and 3D NAND areas, as well as providing a cautious outlook. That said, its solutions for advanced technology and incremental wafer content gains should propel a faster recovery next year. ENTG is one of the most diversified players in the semi-materials industry with its size and scale. We remain attracted to the industry’s high barriers to entry, limited competitors, and high switching costs.”
Overall, ENTG ranks 3rd on our list of best semiconductor equipment stocks to buy according to analysts. While we acknowledge the potential of ENTG as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than ENTG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.