In this article, we will discuss the 11 Most Undervalued Semiconductor Stocks to Buy According to Analysts.
According to Capgemini, building semiconductor manufacturing supply chain resilience is becoming important, with companies mitigating geopolitical risks and rising chip demand. As a result of this shift, there is increased investment in digital tools and heightened efforts to reindustrialize through domestic shoring and nearshoring.
Trends Characterizing the Semiconductor Industry
Capgemini believes that Generative AI adoption is on the rise, prompting semiconductor companies to implement the emerging technology in their products and processes. The semiconductor industry aims to increase its domestic sourcing from the present 40% to 47% to navigate the risks related to international logistics.
In a bid to enhance stability, the industry expects an increase of 4% in nearshoring. Notably, 74% of semiconductor organizations surveyed target to increase their US investments as compared to 59% increasing their investments in Europe, noted Capgemini. The firm also believes that global semiconductor collaboration remains an important supply chain risk-mitigation strategy, enabling semiconductor companies to tap new markets, navigate the unfamiliar regulatory systems, access a range of technologies and expertise, and mitigate the supply chain bottlenecks.
Amidst such trends, let us now have a look at the 11 Most Undervalued Semiconductor Stocks to Buy According to Analysts.
Our Methodology
To list the 11 Most Undervalued Semiconductor Stocks to Buy According to Analysts, we used a screener to shortlist the semiconductor stocks. Next, we narrowed our list to the ones that trade at a forward P/E of less than ~20.0x, and for which analysts see upside potential. Finally, we chose the ones popular among hedge funds and mentioned the hedge fund sentiment around each stock, as of Q1 2025.
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).
Note: All data is as of August 1
11 Most Undervalued Semiconductor Stocks to Buy According to Analysts
11. Ultra Clean Holdings, Inc. (NASDAQ:UCTT)
Forward P/E: ~14.4x
Average Upside Potential: ~30.1%
Number of Hedge Fund Holders: 14
Ultra Clean Holdings, Inc. (NASDAQ:UCTT) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On July 29, Needham analyst Charles Shi lifted the price target on the company’s stock to $30 from $26, while keeping a “Buy” rating, as reported by The Fly. As per the analyst, Ultra Clean Holdings, Inc. (NASDAQ:UCTT) posted strong Q2 2025 results, with revenue beating the Street’s estimate, mainly because of upside from its China business.
Furthermore, the analyst noted that Q3 2025 revenue was guided slightly above the Street. Ultra Clean Holdings, Inc. (NASDAQ:UCTT)’s management sees cost reduction benefits to reflect gradually and more pronounced in Q4 2025, highlighted Needham. Ultra Clean Holdings, Inc. (NASDAQ:UCTT) saw total revenues of $518.8 million, with Products contributing $454.9 million and Services adding $63.9 million. For Q3 2025, it expects revenue of between $480 million – $530 million.
Ultra Clean Holdings, Inc. (NASDAQ:UCTT) remains confident in its ability to surpass the broader semiconductor industry growth, thanks to its capability to navigate evolving conditions, expand its addressable market, gain share, and deliver innovative products and services which advance the multi-year growth strategy.
Frontier Capital Management, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Another underperformer was Ultra Clean Holdings, Inc. (NASDAQ:UCTT), a manufacturer of critical subsystems and services for semiconductor capital equipment manufacturers and semi fabs. While Ultra Clean’s December quarter results exceeded consensus expectations, its outlook for the March quarter disappointed due to product qualification delays at a top Chinese customer and weakening semiconductor equipment demand in China. Management expects the qualification delays to be resolved soon and still anticipates overall company sales to outpace semiconductor wafer fabrication equipment (WFE) industry spending in 2025. Longer term, Ultra Clean is well positioned to gain market share through new design wins at top-tier semi cap equipment manufacturers.”
10. Photronics, Inc. (NASDAQ:PLAB)
Forward P/E: ~10.2x
Average Upside Potential: ~59.9%
Number of Hedge Fund Holders: 25
Photronics, Inc. (NASDAQ:PLAB) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. The Heartland Investment Team, while releasing their investor letter for Heartland Value Fund Q2 2025, highlighted Photronics, Inc. (NASDAQ:PLAB)’s strong balance sheet with minimal debt. Notably, the company’s cash, cash equivalents, and short-term investments at the end of Q2 2025 came in at $558.4 million.
Furthermore, the investment firm opines that Photronics, Inc. (NASDAQ:PLAB)’s work with leading-edge applications, driven primarily by AI, is robust. The trailing-edge technologies associated with consumer electronics, industrial, and autos were mired in a downcycle. However, these end markets continue to show some early signs of a recovery. Elsewhere, the company reported its financial results for Q2 2025, with node migration continuing to act as a positive driver of the company’s IC business at both the high end and the higher end of mainstream.
During Q2 2025, Photronics, Inc. (NASDAQ:PLAB) generated $31 million in operating cash flow, representing 15% of the total revenue. CapEx came in at $61 million, which included its planned expansion in the US. The company is on track to spend $200 million in CapEx in FY 2025 towards capacity, capability, and end-of-life tool initiatives.
9. Synaptics Incorporated (NASDAQ:SYNA)
Forward P/E: ~13.9x
Average Upside Potential: ~32.3%
Number of Hedge Fund Holders: 27
Synaptics Incorporated (NASDAQ:SYNA) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On May 9, TD Cowen reduced the company’s price objective to $80 from $100, while keeping a “Buy” rating, as reported by The Fly. The firm noted that its results were slightly above expectations thanks to the improving IoT revenues. In Q3 2025, Synaptics Incorporated (NASDAQ:SYNA) posted net revenues of $266.6 million.
Furthermore, TD Cowen believes that Synaptics Incorporated (NASDAQ:SYNA) didn’t see any signs of deteriorating consumer demand as backlog and order linearity remained healthy, with the trend potentially extending into the quarter ended September. That being said, the risk remains about the potential demand softness, added the firm. Synaptics Incorporated (NASDAQ:SYNA)’s strategic initiatives in the IoT market have been gaining traction.
During Q3 2025, Synaptics Incorporated (NASDAQ:SYNA) rolled out numerous new products, such as Wi-Fi 7 solutions, broad markets devices, and next-generation Touch controllers, strengthening its portfolio and positioning it for long-term growth. Investment management company First Pacific Advisors released its Q4 2024 investor letter. Here is what the fund said:
“Synaptics Incorporated (NASDAQ:SYNA) designs and sells a collection of chip designs and technologies around wireless networking, data processing, and video/audio compression. The company is also the leader in chips that facilitate touchscreens in consumer devices and cars. After losing its contract for the iPhone display driver in 2018, SYNA has been re-orienting its business toward internet of things (IoT) – allowing edge and peripheral devices to quickly and efficiently process and send data. SYNA has concurrently been hit by the large cyclical slowdown and de-stocking in the semi-conductor industry that caused June 2024’s fiscal year revenue to fall 29% while EPS fell 72%. We are cautiously optimistic regarding Synaptics’ technology and a cyclical rebound and have continued to hold our shares.”
8. Cirrus Logic, Inc. (NASDAQ:CRUS)
Forward P/E: ~14.4x
Average Upside Potential: ~24.9%
Number of Hedge Fund Holders: 31
Cirrus Logic, Inc. (NASDAQ:CRUS) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On June 24, the company announced the launch of its latest additions to the Pro Audio product family- 2 analog-to-digital converters (ADCs) and 2 digital-to-analog converters (DACs) that are designed to provide exceptional audio performance at a cost-effective price point. Further to the success of Cirrus Logic, Inc. (NASDAQ:CRUS)’s professional audio components, the new ADCs and DACs expand its product portfolio.
Through the broadening of its portfolio, Cirrus Logic, Inc. (NASDAQ:CRUS) is giving customers access to its technology not only for high-end products but also for mid-tier devices. This ensures consistent, outstanding quality throughout all levels of audio equipment. With a rich portfolio of products and a healthy pipeline of innovations in development, Cirrus Logic, Inc. (NASDAQ:CRUS) remains focused on capitalizing on opportunities to further broaden its technology and market reach.
In FY 2025, Cirrus Logic, Inc. (NASDAQ:CRUS) started shipping the latest generation of its boosted amplifier and first 22-nanometer smart codec, grew momentum in the laptop market, and rolled out a series of general market components expanding its product portfolio and revenue opportunities throughout a number of markets.
Cirrus Logic, Inc. (NASDAQ:CRUS) is a fabless semiconductor company that is engaged in developing mixed-signal processing solutions and audio products.
7. Onto Innovation Inc. (NYSE:ONTO)
Forward P/E: ~19.7x
Average Upside Potential: ~34.2%
Number of Hedge Fund Holders: 31
Onto Innovation Inc. (NYSE:ONTO) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On June 30, the company announced that it had entered into a definitive agreement for the acquisition of the materials analysis business of Semilab International for $475 million in cash and 706,215 shares of Onto Innovation Inc. (NYSE:ONTO) common stock. The acquisition adds 4 complementary product lines offering inline wafer contamination monitoring as well as materials interface characterization.
With the use of exotic materials in semiconductor manufacturing expanding rapidly, the demand for advanced materials analysis continues to grow significantly. Furthermore, the acquisition aligns with Onto Innovation Inc. (NYSE:ONTO)’s strategy to excel in high-growth, high-margin segments of the semiconductor value chain, mainly areas where device complexity has been accelerating, like the production of chips needed for AI applications. The transaction is anticipated to be immediately accretive to both gross and operating margins and to improve non-GAAP EPS by over 10% in the first year following close, adding more than $130 million to Onto Innovation Inc. (NYSE:ONTO)’s annual revenue.
Invesco Distributors, Inc., an investment management firm, released Q4 2024 investor letter. Here is what the fund said:
“Onto Innovation Inc. (NYSE:ONTO): The company is a semiconductor capital equipment manufacturer that provides process control solutions for microelectronics manufacturing, including defect inspection, metrology systems and software to enhance yield and reduce costs. The company has benefited from the artificial intelligence (AI) boom, but weakness during the quarter provided an attractive entry point for the fund.”
6. ACM Research, Inc. (NASDAQ:ACMR)
Forward P/E: ~14.7x
Average Upside Potential: ~21.1%
Number of Hedge Fund Holders: 32
ACM Research, Inc. (NASDAQ:ACMR) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On June 11, Benchmark Co. analyst Mark Miller maintained a “Buy” rating on the company’s stock and set a price objective of $38.00. The analyst’s rating is backed by a combination of factors, which include significant market opportunities and strategic geographic expansion. ACM Research, Inc. (NASDAQ:ACMR)’s commitment to expanding presence in the US and Korea, together with established operations in Europe, places it for growth.
Furthermore, it also tends to benefit from the majority ownership in ACM Shanghai, which happens to be financially rewarding via dividends. The analyst believes that, with a healthy outlook for shipment growth in 2025 as well as a long-term sales model, ACM Research, Inc. (NASDAQ:ACMR) exhibits robust potential for success. ACM Research, Inc. (NASDAQ:ACMR) posted revenues of $172.3 million in Q1 2025, up 13.2%, showcasing increased sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment and ECP (front-end and packaging), furnace, and other technologies.
5. Qorvo, Inc. (NASDAQ:QRVO)
Forward P/E: ~13.7x
Average Upside Potential: ~16.1%
Number of Hedge Fund Holders: 45
Qorvo, Inc. (NASDAQ:QRVO) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On July 30, Craig-Hallum analyst Anthony Stoss lifted the company’s price objective to $110 from $85, while keeping a “Buy” rating, as reported by The Fly. The firm highlighted that Qorvo, Inc. (NASDAQ:QRVO) posted June revenues and EPS above the Street estimates. Furthermore, it gave guidance better than consensus for September, considering the seasonality and increased content with Apple. The management noted that the strength remains in Defense and Aerospace, while their Infrastructure business continues to recover, added the firm.
Qorvo, Inc. (NASDAQ:QRVO) has been undertaking a broad set of initiatives to structurally improve profitability, and it is witnessing the positive effects of the strategic actions. In the September quarter, Qorvo, Inc. (NASDAQ:QRVO) projects that sequential growth and margin expansion will be aided by increases in Qorvo content and unit volumes in large customer programs. For the September quarter, the company expects quarterly revenue of ~$1.025 billion (plus or minus $50 million) and a non-GAAP gross margin of 48% – 50%.
Investment management company Vulcan Value Partners recently released its Q4 2024 investor letter. Here is what the fund said:
“There were no material contributors to performance. There were three material detractors: Sdiptech AB, Qorvo Inc., and Elevance Health Inc. Qorvo, Inc. (NASDAQ:QRVO) is a leader in radio frequency (RF) systems and power management solutions primarily for mobile phones, wireless infrastructure, aerospace/defense, internet of things, and various other applications. Qorvo lowered near-term guidance largely due to accelerated weakness within its Chinese Android business as customers shifted from mid-tier phones, a market in which Qorvo participates, to entry level phones, a market where Qorvo does not participate. Qorvo continues to execute well in its other mobile markets including Apple and Android’s premium and flagship tiers. Importantly, management’s long-term revenue and margin targets, and confidence in achieving those targets, remain unchanged. We added to our position during the quarter.”
4. NXP Semiconductors N.V. (NASDAQ:NXPI)
Forward P/E: ~17.8x
Average Upside Potential: ~26.2%
Number of Hedge Fund Holders: 49
NXP Semiconductors N.V. (NASDAQ:NXPI) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On July 23, Argus analyst Jim Kelleher lifted the price objective on the company’s stock to $270 from $235, while keeping a “Buy” rating after the Q2 2025 report, as reported by The Fly. While the company’s guidance was above the estimates, the stock traded lower due to tariff and macroeconomic concerns, opines the analyst.
NXP Semiconductors N.V. (NASDAQ:NXPI)’s guidance for Q3 2025 demonstrates the combination of an emerging cyclical improvement in its core end markets and the performance of the company-specific growth drivers. NXP Semiconductors N.V. (NASDAQ:NXPI) continues to fuel strong profitability and earnings through the strengthening of its competitive portfolio and by aligning the wafer fabrication footprint consistent with its hybrid manufacturing strategy.
The company announced the completion of acquisition of TTTech Auto, which is a leader in innovating unique safety-critical systems and middleware for software-defined vehicles (SDVs). The open and modular offering of the NXP CoreRide platform and TTTech Auto’s MotionWise safety middleware supports the automakers in overcoming software and hardware integration barriers.
3. QUALCOMM Incorporated (NASDAQ:QCOM)
Forward P/E: ~12.3x
Average Upside Potential: ~21.6%
Number of Hedge Fund Holders: 82
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On July 31, Susquehanna analyst Christopher Rolland reiterated the bullish stance on the company’s stock, providing a “Buy” rating. The analyst’s rating is backed by a combination of factors, such as QUALCOMM Incorporated (NASDAQ:QCOM)’s ongoing strength in the Auto and IoT sectors.
As per the analyst, the company’s strategic partnerships, like the multi-year agreement with Xiaomi, and expansion into the data center space via the acquisition of Alphawave Semi, demonstrate its growth potential. QUALCOMM Incorporated (NASDAQ:QCOM)’s efforts in developing AI inference accelerator cards and custom SoCs, together with engagement with potential customers, further aid the optimistic outlook. Such factors, coupled with better-than-expected gross margins and a positive revenue forecast, support the analyst’s rating.
For Q4 2025, QUALCOMM Incorporated (NASDAQ:QCOM) expects revenues in the range of $10.3 billion – $11.1 billion, while non-GAAP diluted EPS is expected to be between $2.75 – $2.95.
2. Applied Materials, Inc. (NASDAQ:AMAT)
Forward P/E: ~17.5x
Average Upside Potential: ~15.2%
Number of Hedge Fund Holders: 83
Applied Materials, Inc. (NASDAQ:AMAT) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. On August 4, UBS lifted the price target on the company’s stock to $185 from $175, while keeping a “Neutral” rating, as reported by The Fly. The firm’s analyst sees few surprises in Applied Materials, Inc. (NASDAQ:AMAT)’s print, and believes that Q3 2025 can come slightly ahead of the guidance. The company’s broad capabilities and connected product portfolio continue to fuel robust results in 2025 amidst the dynamic macro environment.
Furthermore, high-performance, energy-efficient AI computing happens to be the dominant driver of semiconductor innovation. Applied Materials, Inc. (NASDAQ:AMAT) is well-placed at the major technology inflections in fast-growing areas of the market, helping its multi-year growth trajectory. For Q3 2025, Applied Materials, Inc. (NASDAQ:AMAT) expects total net revenue of ~$7,200 (+/- $500 million), while its non-GAAP gross margin is anticipated to be 48.3%.
Amidst a dynamic economic and trade environment, Applied Materials, Inc. (NASDAQ:AMAT) didn’t witness changes to the customer demand and remains well-positioned to navigate evolving conditions with a strong global supply chain and diversified manufacturing footprint. Vltava Fund, an investment management company, recently published its Q4 2024 investor letter. Here is what the fund said:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials, Inc. (NASDAQ:AMAT) and Lam Research. Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Applied Materials provides manufacturing equipment, services, and software for the semiconductor, display, and related industries. Its principal business activities are semiconductor systems and Applied Global Services. Its largest customers are Samsung and Taiwan Semiconductors, but its overall clientele is more diversified than is that of Lam Research. At first glance, it would appear that Applied Materials has a somewhat less tangible and definable competitive advantage compared to KLA Corporation and Lam Research, but the numbers do not support such a view. Net margins likewise in the neighborhood of 27% and ROCE around 30% are outstanding. Basically, it can be said that all three companies we own have very similar underlying profitability metrics. Even their valuations, growth, and potential are similar. All have strong free cash flow and strong balance sheets, and they are regularly buying back their own shares over the long term and in large volumes…” (Click here to read the full text)
1. Micron Technology, Inc. (NASDAQ:MU)
Forward P/E: ~8.6x
Average Upside Potential: ~40.5%
Number of Hedge Fund Holders: 96
Micron Technology, Inc. (NASDAQ:MU) is one of the Most Undervalued Semiconductor Stocks to Buy According to Analysts. In its Q2 2025 investor letter, Parnassus Investments stated that the company’s stock is being helped by a healthy position in the broader AI-driven memory market. Furthermore, the management highlighted the strong demand in its latest quarter. In Q3 2025, Micron Technology, Inc. (NASDAQ:MU)’s data center revenue more than doubled YoY, reaching a quarterly record, while consumer-oriented end markets witnessed robust sequential growth.
Coming to Micron Technology, Inc. (NASDAQ:MU)’s end markets, in the data center, the company projects the CY 2025 server market to rise by mid-single digits percentage in units, mainly due to the significant growth in AI servers. Micron Technology, Inc. (NASDAQ:MU) anticipates PC market units to rise in the low single-digit percentage range in CY 2025. In the upcoming quarters, critical catalysts for growth consist of elevated adoption of AI-enabled PCs and the Windows 11 upgrade cycle. Micron Technology, Inc. (NASDAQ:MU) remains focused on bringing differentiated high-performance products to the PC market.
While we acknowledge the potential of MU to grow, 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 MU and that has 100x upside potential, check out our report about this cheapest AI stock.
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