The 3 Most Undervalued Semiconductor Stocks to Buy in April 2024 – InvestorPlace
Here are just a few of the most undervalued semiconductor stocks to buy in April
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Keep an eye on some of the most undervalued semiconductor stocks to buy in April.
According to Global Data, the “overall AI market will be worth $909 billion by 2030, registering a compound annual growth rate (CAGR) of 35% between 2022 and 2030. In the generative AI space, revenues are expected to grow from $1.8 billion in 2022 to $33 billion in 2027 at a CAGR of 80%.”
Even better, according to Fortune Business Insights, the global semiconductor market could be worth nearly $1.4 trillion from $527.9 billion in 2021. Plus, according to The Semiconductor Industry Association, chip sales could explode 13% higher this year to $595.3 billion. That’s all thanks to the surging demand for AI and automotive chips.
For an idea of potential upside with related stocks, just look at Nvidia (NASDAQ:NVDA).
Since the start of 2023, the tech giant ran from a low of about $150 to a current price of $894. Nvidia could push even higher with surging demand for its AI chips. According to PYMNTS.com, “The demand for Nvidia’s chips has been soaring, with the company forecasting 233% growth in first-quarter revenue, exceeding market expectations.”
Given the multiple catalysts, here are three of the most undervalued semiconductor stocks to buy in April.
Weakness is opportunity in Advanced Micro Devices (NASDAQ:AMD).
After dropping from about $230 to around $170, the AMD stock is now consolidating at $178.70. From here, I’d like to see it again challenge $230 in the near term. In the long term, I’d like to see AMD well above $300 a share as AI chip demand grows.
Surging along with Nvidia, it’s another one of the top semiconductor stocks to buy on every dip. With growing exposure to AI, it just launched its MI200X AI GPU, which competes with Nvidia’s offerings and is expanding into AI-personal computers. AMD is also working with cloud giants like Microsoft (NASDAQ:MSFT) and Oracle (NYSE:ORCL).
Helping, analysts over at Melius Research increased its price target on AMD to $265 from $192, with a Buy rating. “With Microsoft as an anchor — and other clouds now picking up — AMD can generate more upside in AI vs. prior estimates,” the firm added.
I’d also take advantage of the recent dip in Taiwan Semiconductor Manufacturing (NYSE:TSM) — another one of the most undervalued semiconductor stocks to buy in April.
After testing a high of $158.40, TSM is now consolidating around $140.22. From here, I’d initially like to see it retest its prior high. Helping, analyst Mehdi Hosseini is out with a positive rating on the stock with a new, higher price target of $180 from $160.
Plus, the company has already said that business has bottomed out and that growing demand for artificial intelligence will help boost revenues. It also doesn’t hurt that the company manufactures chips for other behemoth companies like Advanced Micro Devices and Nvidia.
In addition, as noted on Seeking Alpha, “Demand for AI-optimized chips is outstripping supply, which puts Taiwan Semiconductor Manufacturing into an admirable position and which could justify further valuation gains. The chipmaker said in January that it expects 20% top-line growth in FY 2024 due to [SIC] favorable supply-demand imbalances as industries around the world are racing to adapt to the AI revolution.”
We can also look at Marvell Technology (NASDAQ:MRVL), which is starting to pivot higher after falling from a high of about $85 to a recent low of $65. Last trading at $73.59, I’d like to see MRVL retest its prior high. Helping, the company recently declared a quarterly dividend of six cents, payable on May 1 to shareholders of record as of April 12.
MRVL also authorized another $3 billion to the balance of its existing stock repurchase program, increasing the total current repurchase authority to about $3.3 billion. In addition, Citi (NYSE:C) just opened a 30-day catalyst watch on the MRVL stock ahead of its AI event on April 11.
“If recent history is any guide, snatching up shares of Marvell Technology ahead of its upcoming artificial intelligence presentation could potentially pay off for investors, according to Citi,” as noted by CNBC. The firm also has a Buy rating on the stock with a price target of $91, noting that MRVL’s data center business led by AI is a bright spot.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
Semiconductor, Technology
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Article printed from InvestorPlace Media, https://investorplace.com/2024/04/the-3-most-undervalued-semiconductor-stocks-to-buy-in-april-2024/.
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