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 IPG Photonics Corporation (NASDAQ:IPGP) 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 highly-skilled technician assembling high-performance fiber lasers in a laboratory.
IPG Photonics Corporation (NASDAQ:IPGP)
Share price return in 2024: -32%
Number of Hedge Fund Holders: 31
IPG Photonics Corporation (NASDAQ:IPGP) is engaged in the development, manufacturing, and sale of high-performance fiber lasers and diode lasers for various applications, mainly in materials processing, medical, and advanced applications. The company markets its products globally to OEMs, system integrators, and end users.
The company’s share price declined by approximately 15% following the announcement of its Q4 2023 results on February 13, 2024. Despite reporting better-than-expected results, the outlook for 2024 was weak. The company faced ongoing soft industrial demand in many major regions and lower sales in e-mobility applications in China. In Q1 2024, management highlighted delayed investments in electric battery capacity worldwide, soft industrial demand across most major geographies, and inventory management by some large OEM customers as factors affecting its performance.
The increasing demand for precision cutting, welding, and material processing across industries, particularly in the automotive and aerospace sectors, offers solid growth opportunities for IPG. However, the company has yet to see meaningful changes in trends. On February 11, the company announced its Q4 2024 results, reporting a 22% YoY decline in sales to $234 million, although sales were up 1% quarter-over-quarter. Following the results, a Citi analyst reiterated a Sell rating with a $62 price target for IPG Photonics Corp. (NASDAQ:IPGP) stock despite the stock trading near its 52-week low. The share price is down 11% so far in 2025.
Overall, IPGP ranks 7th on our list of most oversold semiconductor stocks in 2024. While we acknowledge the potential of IPGP 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 IPGP 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.
