We recently compiled a list of the 15 Semiconductor Stocks Making Impressive Comeback From DeepSeek AI Dip. In this article, we are going to take a look at where STMicroelectronics N.V. (NYSE:STM) stands against the other semiconductor stocks.
The semiconductor industry has always been a battleground for technological development, though lately, it has turned into a full-scale battle. The US and China are not only vying to outpace each other in the race to achieve AI superiority but are also actively trying to slow each other down.
The US for instance has placed a number of export restrictions on global firms selling semiconductor technologies to China. Many leading US companies have had to deal with declining China sales as a result of these restrictions. On the other hand, China is trying its best to come up with technologies that compete with those in the US, despite restrictions.
The emergence of DeepSeek AI at the end of January was a wake-up call for the Americans, with China building its latest AI model for a fraction of the cost that the US counterparts spend on their models. While the validity of these claims is debatable, it does show how far China has come when it comes to competing with the US.
As a result of the DeepSeek AI announcement, many semiconductor stocks took a big hit. Two weeks later, some of the stocks started recovering and investors started feeling comfortable with the thought of continued technological dominance by the US. We therefore decided to look at the semi-stocks that were making a comeback from the DeepSeek dip.
To come up with the list of 15 semiconductor stocks making a comeback from DeepSeek AI dip, we only considered stocks with a market cap of at least $10 billion that beat the S&P 500 in the last 5 days of trading.
A worker assembling the inner circuitry of a semiconductor product.
STMicroelectronics N.V. (NYSE:STM)
STMicroelectronics N.V. is a developer, manufacturer, designer, and supplier of semiconductor products. It operates in analog, MEMS, and sensors groups; microcontrollers and digital ICs groups, and automotive and discrete group segments. The company distributes its products through retailers, distributors, and sales representatives. The stock is up 9.04% in the last week against the S&P 500’s 1.13% gains.
STM is likely to witness improving gross margins and inventories in the second half of the year, mainly due to the launch of newer smartphone models. The company is also trimming its workforce, which will not only help improve margins by the end of 2026 but will also drive a reduction of $300 million to $360 million in operating expenses by the second half of 2027.
There are multiple headwinds before all that good news materializes though. To begin with, the analysts are not very optimistic about the company’s short-term prospects. Q1 guidance was below expectations and the reason was inventory correction in ADAS (Advanced Driving Assitance Systems) at a major customer. Lower capacity reservation fees are also impacting the company’s revenues. The company is also facing competition in China in the MCU market, which may well force the company to use a Chinese foundry to stay competitive.
Overall STM ranks 3rd on our list of the semiconductor stocks that are making impressive comeback from DeepSeek AI Dip. While we acknowledge the potential of STM as an 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 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 was originally published at Insider Monkey.