We recently published a list of 10 Cheap Semiconductor Stocks to Buy Now. In this article, we are going to take a look at where Monolithic Power Systems, Inc. (NASDAQ:MPWR) stands against other cheap semiconductor stocks to buy now.
The semiconductor industry has been experiencing a recent wave of surging demand, technological innovation, and shifting macroeconomic dynamics. According to Deloitte, after a robust performance in 2024, the global semiconductor market is forecasted to grow even further in 2025, with total sales expected to reach an all-time high of $697 billion.
This trajectory places the sector firmly on track to meet a great milestone of $1 trillion in annual sales by 2030, for which the sector will require a compound annual growth rate of 7.5% from 2025 onward. By 2040, that figure could potentially double again, underscoring the long-term investment appeal of the semiconductor value chain.
The extraordinary demand for generative artificial intelligence (gen AI) processors is a major factor in this growth. The gen AI chip market was initially expected to reach $50 billion, according to Deloitte’s 2024 Technology, Media, and Telecommunications Predictions. It greatly exceeded those projections, surpassing $125 billion in 2024 and contributing to more than 20% of worldwide chip sales. A combination of CPUs, GPUs, memory, and data center components is driving the rapid expansion of AI infrastructure, which is expected to drive the semiconductor industry and generate disproportionate profits for market leaders while also changing capital allocation tactics.
However, not all corners of the semiconductor landscape have enjoyed AI-level tailwinds. Segments like automotive, analog, and smartphone chips struggled in 2024, hampered by oversupply and subdued end-market demand. Yet, as 2025 unfolds, these verticals are showing signs of recovery. Automotive chips stand to benefit from the ongoing electrification of transport and adoption of advanced driver-assistance systems (ADAS). Analog and IoT-focused semiconductors are gaining renewed investor interest as key markets stabilize. Even the smartphone segment, though slower to rebound, could offer selective upside driven by next-gen device rollouts and operational efficiencies.
The current market environment adds a unique layer of complexity—and opportunity. Following a selloff that has rattled tech stocks in early 2025, valuations across the board have compressed, particularly in the AI and high-growth segments. While not yet at the deep-discount levels seen during the 2022 downturn, the recent correction has made many quality names appear far more attractively priced. According to Morningstar, this has opened a window for investors to re-enter or increase exposure to the sector at more reasonable valuations, especially as overvalued concerns give way to strategic re-evaluation.
Amid this evolving backdrop, lesser-known and undervalued players in the memory and semiconductor equipment spaces are also beginning to draw attention. Stabilizing demand, improved customer alignment, and increasing relevance in the AI hardware ecosystem are providing the groundwork for a potential re-rating. Meanwhile, investment in automation and IoT technologies continues to climb, highlighting a broader market transition that favors resilience and adaptability.
In this article, we identify 10 cheap semiconductor stocks that offer compelling value in today’s shifting landscape. But before diving into the list, we outline the methodology used to filter and evaluate these opportunities.
Our Methodology
For this article, we have screened the most active current semiconductor stocks with a low P/E to arrive at our list of cheap semiconductor stocks to buy now. From there, we picked companies with the highest number of hedge fund investors, as per Insider Monkey’s database of Q4 2024. The stocks are ranked in ascending order of their hedge fund investors.
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).
An engineer examining a DC to DC integrated circuit board, looking for any flaws.
Monolithic Power Systems, Inc. (NASDAQ:MPWR)
Number of Hedge Fund Holders: 51
P/E: 14.85
Monolithic Power Systems, Inc. (NASDAQ:MPWR) is a leading fabless semiconductor company specializing in high-performance, energy-efficient power solutions for a range of industrial, cloud computing, automotive, and consumer applications. Headquartered in Kirkland, Washington, Monolithic Power Systems, Inc. (NASDAQ:MPWR) leverages its advanced technologies to serve global markets with cutting-edge power management solutions. It is among the best cheap semiconductor stocks to buy now.
For the full year, Monolithic Power Systems, Inc. (NASDAQ:MPWR) reported total revenue of $2.21 billion, marking a robust 21.2% increase year-over-year, while fourth-quarter revenue held steady at $621.66 million. Net income surged an impressive 318.06% year-over-year to $1.79 billion, with Q4 net income at $1.45 billion, maintaining strong momentum quarter-over-quarter. The company has delivered an outstanding 5-year sales growth return of 225.30%, underscoring its consistent operational strength.
Investor sentiment remains positive, with 74% of 19 analysts rating the stock a “Buy.” The median price target stands at $762.50, implying a potential upside of 30.63%. Stifel Nicolaus analyst Tore Svanberg recently reaffirmed a “Buy” rating with a bullish $880.00 price target. Monolithic Power Systems, Inc. (NASDAQ:MPWR) advanced 8.15% to close at $580.75 on April 24, outperforming the broader market and marking their third consecutive day of gains. The company will report its Q1 2025 earnings soon, keeping investor interest high.
Overall, MPWR ranks 4th on our list of cheap semiconductor stocks to buy now. While we acknowledge the potential of semiconductor stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MPWR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.