In this article, we will look at the 10 Most Oversold Semiconductor Stocks So Far in 2025.
The World Semiconductor Trade Statistics (WSTS) organization released its Spring 2025 forecast in early June. Following a strong recovery in 2024, the organization forecasts that the global semiconductor market will grow by 11.2% in 2025, reaching a total value of $700.9 billion. This growth is mainly driven by continued momentum in the Logic and Memory segments, which are expected to experience strong double-digit increases due to rising demand for AI technologies, cloud computing infrastructure, and advanced consumer electronics.
On the other side, Discrete Semiconductors, Optoelectronics, and Micro ICs are projected to decline slightly. These declines are said to be caused by the ongoing trade tensions and economic headwinds which have disrupted certain supply chains and weakened demand in some applications.
Despite these patchy trends, recent monthly data has been encouraging. On July 7, the Semiconductor Industry Association (SIA) reported that global semiconductor monthly sales reached $59.0 billion in May 2025, which meant a 19.8% year-over-year increase from $49.2 billion in May 2024. On a month-over-month basis, this sales figure reflected a 3.5% rise over April 2025.
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Adding perspective on the geopolitical landscape, Daniel Newman, CEO of The Futurum Group, discussed the complex dynamics between the U.S. and China in the semiconductor industry during an interview on CNBC on July 16. He emphasized that while both countries rely on each other in many ways, China currently depends more on U.S. chip technology, particularly for powering the development of artificial intelligence (AI).
He further asserted that AI is quickly becoming a key driver of global economic leadership, and advanced semiconductors are central to that progress. Although China has been working to build its own high-performance chips, U.S. technology remains ahead, both in raw power and in supporting software. Despite recent export controls, there is still strong demand in China for U.S. chips, which are viewed as more capable and widely adopted.
The semiconductor sector continues to benefit from strong global demand, particularly through advancements driven by AI. Even so, several stocks have underperformed in 2025 and are trading well below levels that their underlying fundamentals would suggest. In many cases, these declines appear disconnected from the companies’ long-term potential.
With that in mind, let’s explore the 10 most oversold semiconductor stocks so far in 2025.
A closeup of a hand manipulating a complex piece of machinery in a semiconductor factory.
Our Methodology
To identify the most oversold semiconductor stocks so far in 2025, we began by screening for U.S.-listed semiconductor companies with a market capitalization of at least $2 billion that have experienced sharp year-to-date (YTD) share price declines, trailing the S&P Semiconductor Industry Index’s YTD gains of approximately +9% (as of July 21). These large declines may represent temporary market disruptions or investor overreaction, and not necessarily indicate a deterioration in fundamentals. From this initial pool, we selected 10 stocks with the steepest YTD losses and ranked them in descending order based on their performance. Additionally, we have added the number of hedge fund holders for each stock, based on the hedge fund sentiment data as of Q1 2025 from Insider Monkey’s database.
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Note: All pricing and analyst rating data are as of market close on July 21, 2025.
10 Most Oversold Semiconductor Stocks So Far in 2025
10. Diodes Inc. (NASDAQ:DIOD)
Year-to-Date Performance: -10.4%
Number of Hedge Fund Holders: 28
Diodes Inc. (NASDAQ:DIOD) is one of the most oversold semiconductor stocks so far in 2025. While the stock is down over 10% YTD, this performance still compares better than the 24% decline in 2024. That said, analysts remain divided on the name with their view balanced between caution and long-term optimism.
Leaning on the positive side, in mid-June, David Williams, an analyst with Benchmark Co., reiterated his Buy rating on Diodes and raised his price target to $62 from $55. This update followed his meetings with the management, and reflects his growing confidence in the company’s evolving strategy under the new leadership.
According to Williams, Diode Inc. is shifting its strategy with newly appointed CEO Gary Yu and CFO Brett Whitmire at the center. Rather than pursuing scale for its own sake, Diodes is now prioritizing higher-value opportunities, including allocating capital toward selective M&A, scaling system-level solutions, and increasing its content per device. These shifts are aimed at driving top-line acceleration as well as margin expansion.
Despite a challenging macro backdrop, management remains constructive on demand trends, which Williams sees as supportive of the company’s growth outlook and margin recovery. Williams also noted a key evolution in Diodes’ market approach. The company is repositioning itself from a low-cost supplier to a value-added design partner. This move is already helping the company secure new design deals with industry leaders like NVIDIA and AMD. On the manufacturing front, the emphasis has shifted from capacity growth to developing higher-performance technologies and better cost discipline.
In the analyst’s view, these changes could sharpen Diodes’ competitive edge and set the stage for long-term upside, even in a more uncertain macro environment.
Diodes Inc. (NASDAQ:DIOD) delivers high-quality analog and discrete power semiconductor solutions to companies in the automotive, industrial, computing, consumer electronics, and communications markets.
9. Power Integrations Inc. (NASDAQ:POWI)
Year-to-Date Performance: -12.0%
Number of Hedge Fund Holders: 26
Power Integrations Inc. (NASDAQ:POWI) is one of the most oversold semiconductor stocks so far in 2025. Despite the stock’s pullback, Benchmark Company analyst David Williams reiterated a Buy rating and maintained his $70 price target on July 16, following his earlier commentary in May.
Williams’ stance reflects his confidence in the company’s operational footing and longer-term positioning. While the broader macro backdrop remains uneven, Power Integrations has shown consistency in its bookings and maintained lean inventory levels—both signs of disciplined execution amid industry-wide demand softness. The company’s latest quarterly results were broadly in line with expectations, supported by stronger gross margins and tight cost management.
The company is gaining good traction in the electric vehicle market, and that forms a key part of the analyst’s constructive view. Power Integrations is beginning to benefit from its investment in GaN technology, recently securing a notable design win in the EV space. According to Williams, this early success could signal a larger opportunity in automotive, as electrification trends continue.
Regarding the capital allocation strategy, the company continues to engage in share buybacks, supported by a solid balance sheet and strong cash flow generation. The analyst believes that the management’s ongoing repurchases suggest confidence in the long-term outlook.
Power Integrations Inc. (NASDAQ:POWI) is a semiconductor company that manufactures high-voltage integrated circuits for energy-efficient power conversion.
