HomeMarket NewsDiscovering Hidden Gems: 3 Semiconductor Stocks Ready for Investment

Discovering Hidden Gems: 3 Semiconductor Stocks Ready for Investment

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When considering semiconductor stock investments, the likes of Nvidia (NASDAQ:NVDA) or Advanced Micro Devices (NASDAQ:AMD) often dominate the conversation. These industry giants seem to effortlessly churn out profits. Yet, with the relentless pursuit of returns at the forefront, exploring less popular options might just be the key to unlocking untapped potential.

While Nvidia and AMD have undoubtedly showcased remarkable performance, there comes a point where sky-high valuations overshadow the intrinsic value. These companies, not renowned for their dividend payouts, see investors paying a premium for the growth narrative they offer.

However, in the world of corporate ebbs and flows, even the brightest stars can dim. This serves as a compelling reason to turn attention to the underappreciated semiconductor stocks, quietly waiting to deliver impressive returns.

Photronics: Shedding Light on Semiconductor Manufacturing

PLAB stock: Electronic board, pen, processor on the background of schematic circuit diagram and photomask for manufacture of printed circuit boards.

Source: Mentor57 / Shutterstock

Specializing in photomask production, Photronics (NASDAQ:PLAB) quietly plays a significant role in the semiconductor industry. Despite flying under the radar, photomasks serve a critical function as they act as blueprints for imprinting intricate circuit patterns onto silicon wafers during the manufacturing process. In essence, the performance of semiconductors hinges on the precision of photomasks.

Over the past year, PLAB stock boasted an impressive 73% gain, piquing investor interest. Although shares have dipped 3% since the year began, this decline appears temporary, merely a digestion of the previous year’s robust growth. Analysts foresee gradual yet steady expansion in the coming years.

Projections estimate revenue to hit $932.3 million by year-end, marking a 4.5% increase over the previous year. Looking ahead to 2025, anticipated sales of $1 billion reflect a 7.3% surge from the forecasted 2024 figures.

With PLAB stock trading at a seemingly undervalued 13X trailing-year earnings, below the sector median of 29.52X, it presents an appealing investment opportunity.

Himax Technologies: Unveiling the Power of Semiconductor Integration

Shipping label of a box from Himax. HIMX stock.

Source: Mamat Suryadi / Shutterstock

Operating as a fabless semiconductor company, Himax Technologies (NASDAQ:HIMX) specializes in designing and producing chips for various applications. From display drivers to touch controllers and CMOS image sensors, Himax chips find extensive use in consumer electronics and display devices, including smartphones, tablets, and televisions.

Considering the ubiquitous presence of consumer tech, HIMX emerges as a promising semiconductor stock. Trading at a modest 19.55X trailing-year earnings, below the sector average of 29.52X, it represents a solid investment choice. Additionally, sporting a price-to-sales (PS) ratio of 1.04X, further highlights its potential value.

While analysts forecast a moderate growth trajectory for the fiscal year with projected revenue of $901.25 million, some buoyant estimates indicate a revenue uptick to $964 million. The disparity in forecasts underscores the uncertainty, but also the prospect of substantial revenue expansion.

With Wall Street predicting a more than 19% upswing to $7 and a previous Credit Suisse target of $8, HIMX demonstrates its appeal to investors.

SkyWater Technology: Illuminating the Semiconductor Landscape

semiconductor stocks Close-up electronic circuit board. technology style concept. representing semiconductor stocks. top semiconductor stocks to buy now. chip stocks to sell

Source: Shutterstock

Functioning as a semiconductor engineering and fabrication foundry, SkyWater Technology (NASDAQ:SKYT) offers custom semiconductor chip manufacturing services to a diverse client base across various industries. Specializing in analog, mixed signal, and radio frequency (RF) chip production, the company plays a crucial role in the tech ecosystem.

With SKYT stock recording a remarkable 36% increase since the year commenced and a recent 6% uptick, the positive momentum surrounding the company is palpable.

Anticipated revenue for the current fiscal year stands at $322.33 million, showing a 12.4% jump from last year’s $286.68 million. Looking ahead to 2025, revenue forecasts of $350.73 million indicate a nearly 9% ascent from the projected 2024 figures.

Renowned analysts unanimously endorse SKYT as a strong buy, setting an average price target of $15, signaling a promising 23% upside potential and cementing SkyWater as a standout semiconductor stock worthy of investment.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has facilitated major contracts with Fortune Global 500 companies. His unique insights have extended across various industries, providing invaluable perspectives for investment markets, legal sectors, construction management, and healthcare. Follow him on Twitter at @EnomotoMedia.

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