On July 10, the Semiconductor Industry Association (SIA) released its annual State of the US Semiconductor Industry report, which provides an overview of the industry in 2025.
Global semiconductor sales reached $630.5 billion in 2024, exceeding earlier predictions and reaching above $600 billion in annual sales for the first time. According to the World Semiconductor Trade Statistics, global semiconductor industry sales are projected to reach $701 billion in 2025, representing a growth of 11.2% compared to 2024.
This growth is expected to be driven by strong demand for advanced technologies like artificial intelligence, 5G and 6G communications, and autonomous vehicles. These trends are pushing the industry to expand global production capacity significantly.
The US has seen a major boost in semiconductor investments since 2020, thanks to crucial chip manufacturing incentives started during President Trump’s first term. As of July 2025, corporations in the semiconductor industry have announced more than $500 billion in private-sector investments. These investments could triple US chipmaking capacity by 2032.
Around the world, other governments have also provided hundreds of billions of dollars in financial incentives and a number of other support efforts to strengthen their domestic semiconductor sectors. This push reflects the importance of semiconductors in future technologies and economic strength.
With this background in mind, let’s take a look at the 11 best semiconductor penny stocks to buy according to hedge funds.
An automated manufacturing production line of semiconductor components on an assembly line.
Our Methodology
To compile our list of the 11 best semiconductor penny stocks to buy according to hedge funds, we used the Finviz stock screener to look for semiconductor stocks with a share price of under $5 as of July 16, 2025. We also reviewed our own rankings, financial media reports, and online resources to compile a list of the best penny stocks in the semiconductor industry. Next, we focused on the top 11 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q1 2025 database of 1,000 elite hedge funds. Finally, the 11 best semiconductor penny stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q1 2025.
Why do we care about what hedge funds do? 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).
11 Best Semiconductor Penny Stocks to Buy According to Hedge Funds
11. SEALSQ Corp (NASDAQ:LAES)
Share Price: $3.59
Number of Hedge Fund Holders: 4
SEALSQ Corp (NASDAQ:LAES) is one of the best semiconductor penny stocks to buy according to hedge funds. On June 30, SEALSQ Corp (NASDAQ:LAES) announced that it completed a strategic investment by acquiring a 28.30% equity stake in WeCan Group SA, a Swiss company that specializes in blockchain and data compliance.
According to SEALSQ Corp (NASDAQ:LAES), this investment will help accelerate the development and deployment of blockchain-based security solutions for areas like financial services, IoT infrastructure, and Web 3.0 ecosystems.
WeCan Group SA and SEALSQ Corp (NASDAQ:LAES) will work together to combine their technologies and codevelop new solutions. The solutions will mix post-quantum cryptography, secure identity frameworks (KYC/KYB/KYO), and blockchain-powered platforms for compliance.
This deal brings together WeCan Group SA’s expertise in the financial compliance space and SEALSQ Corp’s (NASDAQ:LAES) hardware-based security to build quantum-safe technology for mission-critical sectors.
The two companies will work to add post-quantum security algorithms to SEALSQ Corp’s (NASDAQ:LAES) semiconductors. This will help protect billions of IoT devices from future quantum-based cyber threats.
SEALSQ Corp (NASDAQ:LAES) offers secure semiconductor chips, embedded firmware, and hardware provisioning services. The company focuses on post-quantum technology hardware and software solutions.
10. Amtech Systems, Inc. (NASDAQ:ASYS)
Share Price: $4.52
Number of Hedge Fund Holders: 5
Amtech Systems, Inc. (NASDAQ:ASYS) is one of the best semiconductor penny stocks to buy according to hedge funds. On May 12, Amtech Systems, Inc. (NASDAQ:ASYS) announced its results for the second quarter of fiscal year 2025, which ended on March 31, 2025.
The company’s revenue and adjusted EBITDA for the quarter came in below guidance and failed to meet expectations. This was primarily because of the delayed shipment of a horizontal diffusion furnace. Additionally, the extended downturn for capital equipment serving Amtech Systems, Inc.’s (NASDAQ:ASYS) mature node semiconductor customers led to non-cash impairments and inventory write-downs. The company ended the quarter with a slightly higher cash balance as these were non-cash items.
Despite these short-term challenges in the mature node market, Amtech Systems, Inc. (NASDAQ:ASYS) is seeing strong demand trends in back-end semiconductor markets. Demand for the company’s advanced packaging equipment, especially those supporting AI applications, remains strong.
In the second quarter of fiscal year 2025, bookings for this product line surpassed the total bookings for all of fiscal year 2024. Amtech Systems, Inc. (NASDAQ:ASYS) explained that this strong momentum is supported by secular investments in AI infrastructure, which provides a boost to the company’s advanced packaging equipment sales.
Amtech Systems, Inc. (NASDAQ:ASYS) is a global supplier of semiconductor equipment, consumables, and services for semiconductor wafer fabrication and device packaging.
9. Mobix Labs, Inc. (NASDAQ:MOBX)
Share Price: $0.77
Number of Hedge Fund Holders: 5
Mobix Labs, Inc. (NASDAQ:MOBX) is one of the best semiconductor penny stocks to buy according to hedge funds. On June 26, Mobix Labs, Inc. (NASDAQ:MOBX) reported that it made an unsolicited, non-binding offer to acquire Peraso, Inc. (PRSO).
The proposal involves a premium stock-for-stock transaction where Mobix Labs, Inc. (NASDAQ:MOBX) will exchange newly issued common shares for each PRSO share. The exchange rate offers a 20% premium based on PRSO’s 30-day average closing share price through June 10, 2025.
Peraso is known for its 5G/mmWave chipsets and software, which can complement Mobix Labs, Inc.’s (NASDAQ:MOBX) existing work in defense, aerospace, AI data centers, and 5G markets.
According to the report by Mobix Labs, Inc. (NASDAQ:MOBX), if the deal goes through, the combined company could generate about $20 million in annual revenue. Mobix Labs, Inc. (NASDAQ:MOBX) also expects to improve profits through scale-driven synergies in sales, production, and procurement.
Mobix Labs, Inc. (NASDAQ:MOBX) is a semiconductor company specializing in the supply of advanced connectivity solutions for aerospace, defense, AI, and 5G infrastructure markets.
8. Sequans Communications S.A. (NYSE:SQNS)
Share Price: $3.86
Number of Hedge Fund Holders: 7
Sequans Communications S.A. (NYSE:SQNS) is one of the best semiconductor penny stocks to buy according to hedge funds. On July 10, Sequans Communications S.A. (NYSE:SQNS) announced that it has acquired 370 Bitcoins. This purchase is part of the company’s newly launched Bitcoin treasury strategy.
This acquisition was funded by Sequans Communications S.A.’s (NYSE:SQNS) recent offering of ordinary shares and convertible debentures.
According to the CEO, Georges Karam, Sequans Communications S.A. (NYSE:SQNS) plans to strategically accumulate more than 2,000 Bitcoins in the coming weeks. The company sees Bitcoin as a good long-term store of value for its shareholders.
On July 14, Sequans Communications S.A. (NYSE:SQNS) reported it acquired an additional 683 Bitcoins for about $79 million. After this purchase, the company had acquired a total of 1,053 Bitcoins for approximately $120 million.
Sequans Communications S.A. (NYSE:SQNS) is a semiconductor company that specializes in wireless cellular technology for the Internet of Things (IoT). The company has adopted Bitcoin as a primary treasury reserve asset as part of its long-term financial strategy.
7. AXT, Inc. (NASDAQ:AXTI)
Share Price: $2.39
Number of Hedge Fund Holders: 7
AXT, Inc. (NASDAQ:AXTI) is one of the best semiconductor penny stocks to buy according to hedge funds. On July 9, AXT, Inc. (NASDAQ:AXTI) announced a preliminary revenue range for the second quarter of 2025, which ended on June 30, 2025. The company’s full financial results for the are scheduled to be released on July 31.
For the second quarter of 2025, AXT, Inc. (NASDAQ:AXTI) expects its revenue to be between $17.5 million and $18 million. This is lower than the previous guidance of $20 million to $22 million, which was provided by the company on May 1. The lower revenue guidance range is mainly because AXT, Inc. (NASDAQ:AXTI) faced delays in getting export control permits for its gallium arsenide products in the second quarter. Additionally, demand in China was weaker than expected.
The company is still positive about its role in a number of new technology trends but finds the current geopolitical climate challenging for its business.
However, during the second quarter, AXT, Inc. (NASDAQ:AXTI) saw a meaningful increase in AI-related demand for indium phosphide in China. The company’s subsidiary, Beijing Tongmei Xtal Technology Co., also secured its first export control permits for indium phosphide late in the quarter. Despite the lower revenue guidance, AXT, Inc. (NASDAQ:AXTI) expects to deliver gross margins in the high single digits for the second quarter of 2025.
AXT, Inc. (NASDAQ:AXTI) is a material science company that develops and manufactures semiconductor substrate wafers. The company’s wafers are made up of indium phosphide (InP), gallium arsenide (GaAs), and germanium (Ge).
6. Atomera Incorporated (NASDAQ:ATOM)
Share Price: $4.73
Number of Hedge Fund Holders: 12
Atomera Incorporated (NASDAQ:ATOM) is one of the best semiconductor penny stocks to buy according to hedge funds. On July 9, Atomera Incorporated (NASDAQ:ATOM) and Incize, a Belgian company that specializes in advanced semiconductor characterization and modeling, announced a strategic collaboration aimed at improving Gallium Nitride on Silicon (GaN-on-Si) technologies.
Traditional silicon is reaching its limits in some applications. GaN-on-Si is a scalable, cost-effective alternative that combines Gallium Nitride’s strong performance with silicon’s easy manufacturing.
By using Atomera Incorporated’s (NASDAQ:ATOM) Mears Silicon Technology (MST) and Incize’s advanced characterization, the companies aim to speed up the production of next-generation radio frequency (RF) and power devices.
This collaboration will focus on optimizing GaN-on-Si device performance for high-frequency and high-power applications. The companies will be looking to serve markets in wireless infrastructure like 5G and 6G, satellite communications, and advanced power electronics.
Atomera Incorporated (NASDAQ:ATOM) is a semiconductor materials and IP licensing company. The company’s Mears Silicon Technology (MST) improves transistor performance and efficiency by engineering materials at the atomic level.
5. indie Semiconductor, Inc. (NASDAQ:INDI)
Share Price: $4.47
Number of Hedge Fund Holders: 15
indie Semiconductor, Inc. (NASDAQ:INDI) is one of the best semiconductor penny stocks to buy according to hedge funds. On July 14, indie Semiconductor, Inc. (NASDAQ:INDI) reported an important update about its new LXM-U laser technology.
These ultra-low noise LXM-U lasers by indie Semiconductor, Inc. (NASDAQ:INDI) are helping to power the next generation of quantum technologies by delivering frequency stability and integration flexibility.
The LXM-U is the latest in indie Semiconductor, Inc.’s (NASDAQ:INDI) portfolio of narrow-linewidth semiconductor lasers and it is especially good for quantum technologies, like quantum key distribution (QKD) and quantum computing. This technology offers ultra-low-frequency noise, ten times lower than competing technologies, and narrow-linewidth to deliver stability and precision that is necessary for the most demanding quantum applications.
According to the report by indie Semiconductor, Inc. (NASDAQ:INDI), the laser offers long-term stability to maintain locked operation for days, which allows for reliable transmission of cryptographic keys.
A unique feature of the LXM-U laser is that it is easy to package together with other lasers or Photonic Integrated Chips (PICs). This makes it possible for indie Semiconductor, Inc. (NASDAQ:INDI) to work closely with its customers on the design, using the customers’ proprietary technology with its laser to build powerful, efficient light engines.
indie Semiconductor, Inc. (NASDAQ:INDI) is a semiconductor company that is mainly focused on developing and supplying automotive semiconductors, photonics, and software platforms.
4. Valens Semiconductor Ltd. (NYSE:VLN)
Share Price: $2.70
Number of Hedge Fund Holders: 15
Valens Semiconductor Ltd. (NYSE:VLN) is one of the best semiconductor penny stocks to buy according to hedge funds. On July 15, Valens Semiconductor Ltd. (NYSE:VLN) reported that its VA7000 chipsets are now being used in D3 Embedded’s MIPI A-PHY platform for embedded vision.
These VA7000 chipsets by Valens Semiconductor Ltd. (NYSE:VLN) are the main connectivity solution for a comprehensive camera-to-processor MIPI A-PHY platform. This platform is the first product-ready solution in the market that brings the advanced A-PHY connectivity standard to embedded vision systems.
The A-PHY platform offers several advantages for D3’s customers, such as strong resistance to electromagnetic interference (EMI), longer link distances, and operation with basic, low-cost cables.
The MIPI A-PHY standard ensures excellent Electromagnetic Compatibility (EMC) performance, which means reliable data transmission even in industrial settings with electrical noise. Chipsets based on A-PHY technology support high-speed data transmission over cables as long as 30 meters or more without losing signal quality.
Additionally, these chips allow for multi-gigabit connectivity through both Unshielded Twisted Pair (UTP) and micro-coaxial cables. This helps system designers to balance cost, weight, and mechanical requirements as per their specific application needs.
These chipsets also provide built-in diagnostics for link monitoring and preventive maintenance so that systems can run around the clock. According to the report by Valens Semiconductor Ltd. (NYSE:VLN), these features make A-PHY-based chipsets a great fit for a broad range of applications, including robotics, industrial vehicles, industrial automation, and medical imaging.
Valens Semiconductor Ltd. (NYSE:VLN) is an Israeli fabless manufacturing company that focuses on high-performance connectivity. The company provides semiconductor solutions to the automotive and audio-video industries.
3. GCT Semiconductor Holding, Inc. (NYSE:GCTS)
Share Price: $1.54
Number of Hedge Fund Holders: 15
GCT Semiconductor Holding, Inc. (NYSE:GCTS) is one of the best semiconductor penny stocks to buy according to hedge funds. On June 11, GCT Semiconductor Holding, Inc. (NYSE:GCTS) shared that it has started delivering its new 5G chipsets to its customers for testing. Some of the customers are Airspan Networks and Orbic North America, LLC.
The company plans to keep sending out more samples to complete the initial demand from its lead customers. GCT Semiconductor Holding, Inc. (NYSE:GCTS) are providing these samples in both chip and module forms, depending on what each customer wants.
Once the testing process is complete, the company will work with its customers to enhance device performance and to determine production demands. GCT Semiconductor Holding, Inc. (NYSE:GCTS) is ready to meet the demand because of its strong supply chain and experience in delivering high-performance solutions.
Initially, GCT Semiconductor Holding, Inc. (NYSE:GCTS) is focusing on mid-tier applications and immediate demand for the growing 5G market, which will include developing a Verizon-certified module.
GCT Semiconductor Holding, Inc. (NYSE:GCTS) is a fabless designer that delivers advanced 5G and 4G LTE semiconductor solutions.
2. Magnachip Semiconductor Corporation (NYSE:MX)
Share Price: $3.95
Number of Hedge Fund Holders: 18
Magnachip Semiconductor Corporation (NYSE:MX) is one of the best semiconductor penny stocks to buy according to hedge funds. On May 12, Magnachip Semiconductor Corporation (NYSE:MX) shared its results for the first quarter of 2025.
The company reported its fourth quarter in a row with year-over-year growth from continuing operations. This performance was driven by strong design wins and momentum in Power Analog Solutions (PAS) and Power IC (PIC).
In the first quarter alone, Magnachip Semiconductor Corporation (NYSE:MX) released 27 new-generation PAS products. These products are fully qualified and are ready for commercial sampling. The company secured new design wins that span the Industrial, Automotive, Consumer, and Communication markets.
Magnachip Semiconductor Corporation (NYSE:MX) has plans to introduce over 40 new-generation PAS products in 2025, and about 55 more in 2026. Through these new products, the company expects to open new revenue opportunities and drive higher gross margins over time.
In Q1 2025, the company’s Power IC (PIC) business grew by 44.1% year-over-year. This growth was driven by strong performance in its TV-LED and OLED power IC products.
Looking ahead, Magnachip Semiconductor Corporation (NYSE:MX) remains cautious about geopolitical and macroeconomic uncertainties. However, the company forecasts both its PAS and PIC businesses to deliver sequential and year-over-year growth in the second quarter.
Magnachip Semiconductor Corporation (NYSE:MX) designs and manufactures analog and mixed-signal power semiconductor platform solutions for a range of applications, including industrial, automotive, communication, consumer, and computing.
1. Wolfspeed, Inc. (NYSE:WOLF)
Share Price: $1.51
Number of Hedge Fund Holders: 25
Wolfspeed, Inc. (NYSE:WOLF) is one of the best semiconductor penny stocks to buy according to hedge funds. On June 22, Wolfspeed, Inc. (NYSE: WOLF) unveiled a solid plan to proactively strengthen its capital structure. The company announced a Restructuring Support Agreement with key lenders, including holders of over 97% of its senior secured notes, a subsidiary of Renesas Electronics, and convertible debtholders holding over 67% of the outstanding convertible notes.
With this robust debt restructuring strategy, Wolfspeed, Inc. (NYSE:WOLF) aims to lower its overall debt by about $4.6 billion, which means the company will cut its debt by around 70%. The company expects to reduce the annual total cash interest payments by about 60%.
Through this forward-looking plan, Wolfspeed, Inc. (NYSE:WOLF) expects to position itself to execute on its long-term growth strategy and accelerate its path to profitability.
As of the third quarter of its fiscal year 2025, Wolfspeed, Inc. (NYSE:WOLF) has about $1.3 billion in cash. This provides the company with sufficient near-term liquidity to support its customers and pay its suppliers. The company expects to complete the restructuring by the end of the third quarter of calendar year 2025.
Wolfspeed, Inc. (NYSE:WOLF) is an American advanced semiconductor technology company that specializes in silicon carbide technologies. The company offers silicon carbide material, Power Modules, Discrete Power Devices, and Power Die Products for various applications.
While we acknowledge the potential of WOLF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than WOLF and that has a 100x upside potential, check out our report about this cheapest AI stock.
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