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 STMicroelectronics N.V. (NYSE:STM) 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 worker assembling the inner circuitry of a semiconductor product.
STMicroelectronics N.V. (NYSE:STM)
Share price return in 2024: -48%
Number of Hedge Fund Holders: 22
STMicroelectronics N.V. (NYSE:STM) produces a wide array of analog, digital, and mixed-signal integrated circuits (ICs) and discrete devices for industrial, automotive, consumer electronics, and communication markets.
In 2024, STMicroelectronics N.V. (NYSE:STM) experienced a near 50% drop in its share price, largely due to persistent weakness in the automotive and industrial end markets, which negatively impacted the company’s overall financial performance. The stock declined by 13% up until mid-July, but the situation worsened significantly following weaker Q2 2024 results and a grim outlook across its major segments. The Industrial segment revenue declined by over 50%, Automotive by about 15%, and Personal Electronics by approximately 6%. Management’s comments were also pessimistic, highlighting that customer orders for Industrial did not improve and Automotive demand decreased during the quarter, contrary to their previous expectations.
Analysts maintain a broadly cautious view on STMicroelectronics N.V. (NYSE:STM), with the consensus still predicting an 8% downside. However, on February 18, Jefferies upgraded the stock to Buy from Hold and raised their price target. The analyst sees minimal downside to consensus estimates from this point and anticipates growth acceleration in the second half of 2025 due to post-inventory correction normalization, industrial demand recovery, and increased semiconductor content in new iPhone versions. The stock has risen by 6% so far this year.
Overall, STM ranks 2nd on our list of most oversold semiconductor stocks in 2024. While we acknowledge the potential of STM 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 STM 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.
