In this article, we discuss the 10 cheap semiconductor stocks to invest in today. If you want to skip our detailed analysis of these stocks, go directly to the 5 Cheap Semiconductor Stocks to Invest In Today.
Data released by World Semiconductor Trade Statistics reveals that global semiconductor sales will top $600 billion in 2022, growing at a compound annual growth rate of close to 9% as the demand for semiconductors rises throughout the world. The Semiconductor Industry Association, a trade body that represents over 98% of US chip-makers by revenue and nearly two-thirds of those based outside the US, claims that chip sales grew at a rate of 26% this year even as supply chain pressures hampered production.
Some of the top semiconductor stocks like NVIDIA Corporation (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Advanced Micro Devices, Inc. (NASDAQ:AMD), among others, have all soared this year due to the increase in demand for high-end chips following a faster-than-expected post-pandemic economic recovery. The valuations of these firms are now in the hundreds of billions, mostly putting them out of reach for the average investors. For these investors, cheaper chip stocks offer better value for money.
Our Methodology
The companies that are trading at relatively cheap prices compared to their growth potential were selected for the list. The real-time share prices of the stocks, as of December 15, are mentioned alongside other details for further clarity.
In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks were also considered. Hedge fund sentiment was included as a classifier as well.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
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Cheap Semiconductor Stocks to Invest In Today
10. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 63
Share Price as of December 15: $83.29
Micron Technology (NASDAQ:MU) markets memory and storage products. The firm plans to spend $150 billion over the next decade into expansion of memory and storage production as well as research and development into the field.
Evercore ISI analyst CJ Muse recently raised the price target on Micron Technology (NASDAQ:MU) stock to $120 from $100 and kept an Outperform rating, terming the shares “structurally under-valued”.
At the end of the third quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $3.8 billion in Micron Technology (NASDAQ:MU).
Just like NVIDIA Corporation (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Advanced Micro Devices, Inc. (NASDAQ:AMD), Micron Technology (NASDAQ:MU) is one of the stocks attracting the attention of growth investors.
In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Micron Technology (NASDAQ:MU) was one of them. Here is what the fund said:
“Micron is a manufacturer of memory semiconductor chips. Micron appreciated 17.3% during the quarter.
With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.
As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins.
While the cyclical nature of DRAM hasn’t changed, the cycles themselves continue to become more benign, leading to long-term economic improvement across these businesses. Micron is now continuously profitable, with industry players in a dramatically stronger position than even just five years ago.
The biggest negative surprise in the quarter came from Micron’s exit from its 3D XPoint hybrid memory business. The company also announced its decision to sell its accompanying Utah fab. Fortunately, this development does not alter the investment thesis much since 3D XPoint was an option ticket for future growth. While it’s unfortunate this product didn’t pan out, now is an excellent time to sell a fab, so perhaps it is a blessing in disguise?”
9. Lattice Semiconductor Corporation (NASDAQ:LSCC)
Number of Hedge Fund Holders: 19
Share Price as of December 15: $75.02
Lattice Semiconductor Corporation (NASDAQ:LSCC) makes and sells semiconductor products. The company has grown revenue throughout the year along with other chip stocks and also expanded impressively in the communications, computing, industrial, and auto industries.
On November 15, Lattice Semiconductor Corporation (NASDAQ:LSCC) announced that it had acquired Mirametrix, a software firm, in an all-cash transaction. Mirametrix provides advanced artificial intelligence solutions for computer vision applications.
At the end of the third quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $366 million in Lattice Semiconductor Corporation (NASDAQ:LSCC).
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Lattice Semiconductor Corporation (NASDAQ:LSCC) was one of them. Here is what the fund said:
“Lattice Semiconductor is a vendor of field programmable gate array (FPGA) chips used in personal computers, 5G infrastructure, routers and switches, and servers, to name a few. The company now has a new board and management team—the current CEO joined from leading microprocessor provider Advanced Micro Devices in late 2018—which have embarked on a product-transformation journey. The company has refreshed its FPGA products in the small/low power segment of the market—making it more focused on addressing high return-on-investment use cases centered around power-efficient applications—carving itself a niche behind the two market leaders focused on high-end, Xilinx and Intel Corporation. In addition to providing FPGA chips to data centers and new 5G infrastructure— particularly compelling opportunities given these end markets are and will likely continue benefiting from strong secular tailwinds—we believe the company is well positioned to tap into lowpower/reprogrammable chips as well as industrial and automotive end markets.”
8. MaxLinear, Inc. (NASDAQ:MXL)
Number of Hedge Fund Holders: 24
Share Price as of December 15: $72.25
MaxLinear, Inc. (NASDAQ:MXL) provides systems-on-chips solutions. The company has seen revenue surge on the back of WiFi 6/6E growth and content gains in on-premise equipment. The firm also seems to be executing growth plans effectively.
Craig-Hallum analyst Richard Shannon recently reiterated a Buy rating on MaxLinear, Inc. (NASDAQ:MXL) stock and raised the price target to $90 from $80, touting the potential of the firm in the fiber business.
At the end of the third quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $155 million in MaxLinear, Inc. (NASDAQ:MXL), up from 21 in the preceding quarter worth $134 million.
7. Axcelis Technologies, Inc. (NASDAQ:ACLS)
Number of Hedge Fund Holders: 22
Share Price as of December 15: $63.47
Axcelis Technologies, Inc. (NASDAQ:ACLS) markets ion implantation and other processing services related to the semiconductor industry. The firm recently beat market estimates on earnings per share and revenue for the third quarter by $0.10 and $6 million respectively.
In July, Axcelis Technologies, Inc. (NASDAQ:ACLS) announced that it had shipped multiple Purion high energy and high current systems to a semiconductor foundry in China. The systems produce mature process technology.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Rima Senvest Management is a leading shareholder in Axcelis Technologies, Inc. (NASDAQ:ACLS) with 1.8 million shares worth more than $88 million.
6. Ultra Clean Holdings, Inc. (NASDAQ:UCTT)
Number of Hedge Fund Holders: 19
Share Price as of December 15: $51.59
Ultra Clean Holdings, Inc. (NASDAQ:UCTT) provides tools and subsystems for the semiconductor market. The stock has consistently outperformed the broader semiconductor market in the past few years and looks set to continue on that trajectory heading into 2022.
On September 17, investment advisory DA Davidson maintained a Buy rating on Ultra Clean Holdings, Inc. (NASDAQ:UCTT) stock with a price target of $75, noting the strong industry data points of the firm and highlighting a valuation that was below peers in the marketplace.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Royce & Associates is a leading shareholder in Ultra Clean Holdings, Inc. (NASDAQ:UCTT) with 753,066 shares worth more than $32 million.
Along with NVIDIA Corporation (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Advanced Micro Devices, Inc. (NASDAQ:AMD), Ultra Clean Holdings, Inc. (NASDAQ:UCTT) is one of the stocks on the radar of elite investors.
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Disclosure. None. 10 Cheap Semiconductor Stocks to Invest In Today is originally published on Insider Monkey.
