Wall Street has gotten increasingly bearish on semiconductor stocks over the past few months as concerns about the profitability and sustainability of AI have gained traction. This was compounded by DeepSeek at first. The market recovered from that, but as Microsoft started canceling some data center leases and Nvidia failed to beat earnings by stellar margins, sentiment has turned sour again.
AI-related semiconductor stocks, which have been pick-and-shovel plays, are bearing the brunt of the selloffs, as they are the ones sitting on top of a two-year-long rally. This is a cyclical industry, so it’s possible that semiconductor stocks are now shifting into a bearish phase.
You should keep up with these stocks, as they’ve delivered multibagger gains over the past two years. There’s a good chance that the AI narrative recovers from here. And even if it doesn’t, it’s still worth looking into the big losers and the reasons behind their decline.
A technician looking at a circuit board of analog semiconductor products.
Methodology
For this article, I screened the worst-performing semiconductor stocks year-to-date.
I will also mention the number of hedge fund investors in these stocks. 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).
15. ON Semiconductor Corp (NASDAQ:ON)
Number of Hedge Fund Holders In Q4 2024: 52
ON Semiconductor Corp (NASDAQ:ON) makes power and sensing semiconductor products.
The stock is down significantly so far in 2025 as it reported Q4 2024 revenue of $1.72 billion, which missed analyst estimates of $1.76 billion. Adjusted EPS also came in at $0.95 and below the expected $0.97. All of its major segments reported revenue declines.
Power Solutions Group’s revenue was down 16% to $809.4 million, Analog and Mixed-Signal Group was down 18% to $610.6 million, and Intelligent Sensing Group’s revenue was down about 2% to $302.5 million.
On top of that, the company provided weak guidance for Q1 2025. Revenue is expected to be in the range of $1.35 billion to $1.45 billion, well below analyst estimates of $1.69 billion. Gross margin guidance was also reduced to 38.9%-40.9%. Previously, this was at above 45%.
Also, ON Semiconductor announced a restructuring plan that included cutting 9% of its workforce to reduce costs amid declining demand and falling revenue. The layoffs are expected to cost $50 million to $60 million in charges this year.
The consensus price target of $67.12 implies 49.45% upside.
ON stock is down 29.02% year-to-date.
14. MaxLinear Inc (NASDAQ:MXL)
Number of Hedge Fund Holders In Q4 2024: 26
MaxLinear Inc (NASDAQ:MXL) makes radio frequency, analog, mixed-signal, and digital integrated circuits for high-speed communication systems.
The stock is down significantly so far in 2025 as MaxLinear reported Q4 2024 revenue of $92.17 million, down 26% year-over-year. GAAP EPS loss came in at $0.68 and missed analyst expectations by $0.26. Operating expenses as a percentage of revenue increased significantly compared to the prior year.
It also gave weak Q1 2025 guidance and projects revenue between $85 million and $105 million. This guidance disappointed investors who had hoped for stronger recovery signals following bullish management commentary at industry conferences.
The consensus price target of $25.5 implies 86.13% upside.
MXL stock is down 29.32% year-to-date.