We recently compiled a list of the 10 Undervalued Chip Stocks Near 52-Week Lows. In this article, we are going to take a look at where ON Semiconductor Corporation (NASDAQ:ON) stands against the other undervalued chip stocks.
Energy and EV stocks continue to be in focus as Donald Trump signs a bunch of executive orders that will have far-reaching impacts on many industries. He even revoked an executive order related to AI, though it addresses a matter that may not directly impact a company’s sales in the near term. AI stocks are going under the radar for a few weeks but with earnings season about to get into full gear, we may not have the same opportunities in a couple of weeks that we have now.
Many of the chip stocks continue to stay undervalued. The main reason is the lack of demand in the niche industries that these companies serve. But this demand will eventually shift at some point in 2025, which is what makes them so attractive to consider at this point.
We came up with 10 stocks that we believe are undervalued, near their 52-week lows, and present good investment opportunities. To come up with the 10 undervalued chip stocks that are near 52-week lows, we only considered stocks with a market cap of between $10 billion and $200 billion that hit their 52-week lows recently.
Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.
A semiconductor engineer in a state-of-the-art laboratory, analyzing advanced semiconductor products.
ON Semiconductor Corporation (NASDAQ:ON)
ON Semi is just within 3% of its 52-week low, presenting a compelling investment opportunity to investors. The stock is down 24% in a year, and understandably so. It is another victim of the slow industrial and automotive end markets. But it has a lot of things going well for it.
The company’s business model is one example. The firm is set to be a future industry leader with its sensors and power management solutions quite liked by the two main industries it targets. The company’s management is also focused on long-term growth, which is why they don’t use too many buzzwords to prop up stock sentiment.
The firm’s previous earnings report disappointed with a 19% YoY revenue decline, with the industrial segment leading most of the losses. This slump will be recovered when the industry dynamics shift again. What will then help the company most is the improving gross margins. Moreover, once the company completes the acquisition of the New York plant run by GlobalFoundries, its efficiency will improve too. Ultimately this will bring a massive impact on the bottom line once the automotive and industrial markets pick up the pace again. The stock is a good buy at current levels.
Overall ON ranks 2nd on our list of the undervalued chip stocks near 52-week lows. While we acknowledge the potential of ON as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as ON 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 was originally published at Insider Monkey.
