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3 Massively Undervalued Semiconductor Stocks With Major Upside


  • Semiconductor companies drive innovation and offer long-term growth opportunities.
  • MaxLinear (MXL): Undervalued semiconductor company with growth potential in infrastructure.
  • Skyworks Solutions (SWKS): Leader in wireless connectivity. 
  • Intel (INTC): Despite recent challenges, it exhibits financial strength, a commitment to innovation, and diversification. 
Undervalued semiconductor stocks - 3 Massively Undervalued Semiconductor Stocks With Major Upside

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Semiconductor manufacturing companies play a vital role in the competitive technology sector. Without them, connectivity and innovation in our world is almost nonexistent. So how can you profit from this reality?

We will take a look at three of the best undervalued semiconductor stocks that you should consider investing in now. 

MaxLinear (MXL)

A hand holding a phone that shows the MaxLinear (MXL) logo.

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MaxLinear (NASDAQ:MXL) is a leading supplier of analog, digital and mixed-signal integrated circuits for various communications applications. The company has experienced significant growth in recent years due to its focus on developing innovative and attractive solutions in the semiconductor market.

According to GuruFocus data, the GF Value for $XML is $65.49. This indicates that the company may be undervalued, which presents an exciting opportunity for investors. Looking at the financial results for the first quarter of 2023, MaxLinear posted net revenues of $248.4 million, with a non-GAAP gross margin of 60.3%. While revenues declined sequentially and year over year, the company managed to maintain healthy margins. It generated a solid operating cash flow of approximately $42.2 million.

Its outstanding performance is partly due to growth in the infrastructure segment, which increased 46% sequentially and 40% compared to last year. This growth has been driven primarily by the expansion of the 5G millimeter-band and microwave wireless 5G backhaul platform solutions.

Moreover, the company is working on the antitrust approval of its pending acquisition of Silicon Motion. If this goes through, the company will have new opportunities and strengthen its market position.

Skyworks (SWKS)

the Skyworks website is loading on a smartphone

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Skyworks Solutions (NASDAQ:SWKS) is a high-performance analog and mixed-signal semiconductor innovator that connects people, places and things. The company has been a leading player in developing wireless connectivity solutions, which has enabled it to gain prominence in the era of digitization and the Internet of Things (IoT).

As per GuruFocus, the GF Value for SWKS is $171.91. In fiscal Q2 2023, Skyworks Solutions recorded revenue of $1.153 billion and an operating income of $273.3 million on a GAAP basis. On a non-GAAP basis, income was $386.1 million. The company managed to maintain its profitability and generated solid cash flow.

Skyworks has demonstrated market leadership through strategic partnerships with major companies, such as Samsung and Cisco (NASDAQ:CSCO). These partnerships enable new capabilities and solutions in smartphones and enterprise networking. 

In addition, the company is positioned for the deployment of 5G technology and the growing demand for connected devices. As a result, it has secured 5G platforms and expanded its offering in small cell infrastructure and industrial solutions.

Intel (INTC)

Close up of Intel (INTC) sign at entrance of The Intel Museum in Silicon Valley. Intel is an American multinational corporation and technology company.

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Intel (NASDAQ:INTC), one of the world’s leading semiconductor companies, has driven technological innovation for decades. As the semiconductor industry evolves and faces new challenges, Intel has sought to expand its presence in different segments, adapting to changing market demands.

Looking at GuruFocus data, the GF Value for INTC is $34.93. Although Intel has faced major trials lately, including a 36% decline in total revenue compared to Q1 2022, the company has taken steps to overcome these difficulties and regain its cutting edge.

Intel has continuously invested in emerging technologies like cloud computing, high-performance computing, and artificial intelligence to drive growth and diversification. The company has also made strategic acquisitions to broaden its product portfolio and strengthen its position in key segments. 

While recent financial reports may paint a challenging picture for Intel, the company has established a solid foundation. For instance, Intel is developing new products, such as Intel Arc processors for high-end gaming and graphics. These could boost its position in the semiconductor market. In addition, Intel has announced plans to expand its manufacturing capacity and improve its chip supply performance. 

With solid fundamentals and a focus on innovation, these companies represent attractive investment opportunities for those seeking long-term returns within the technology sector. 

As of this writing, Gabriel Osorio-Mazzilli did not hold (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.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.

Article printed from InvestorPlace Media, https://investorplace.com/2023/06/3-massively-undervalued-semiconductor-stocks-with-major-upside/.

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