The 3 Best Semiconductor Stocks to Buy in February 2024


  • Jump on these bargain ideas for best semiconductor stocks to buy this month.
  • Diodes (DIOD): Diodes provides the chip industry with critical components.
  • Amkor Technology (AMKR): Amkor offers vital packaging and testing services.
  • Himax Technologies (HIMX): Himax delivers strong relevance for the consumer electronics space.
best semiconductor stocks - The 3 Best Semiconductor Stocks to Buy in February 2024

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With the ever-rising importance of computer chips, the best semiconductor stocks represent a popular topic. Nevertheless, we typically want a good deal, not just buy something at stratospheric record heights.

Fortunately, you’re in luck. Do a little digging around and you can find compelling opportunities among the best semiconductor stocks that just haven’t enjoyed the media spotlight. Even better, with the usual suspects garnering the lion’s share of the attention, several relevant businesses are trading hands for ridiculously low valuations.

As with anything, though, the market eventually closes the opportunity arbitrage if you will. With that, think about these discounted ideas for best semiconductor stocks – but think fast!

Diodes (DIOD)

a close up image of a semiconductor
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A global manufacturer and supplier of application specific standard products, Diodes (NASDAQ:DIOD) plays a critical role in the computer-chip ecosystem. Offering relevancies for the discrete, logic, analog and mixed-signal semiconductor market, Diodes serves multiple industries. These include consumer electronics, computing, communications and automotive, among others.

To be blunt, Diodes isn’t exactly one of the most celebrated names among the best semiconductor stocks. You don’t really see too many folks write riveting analyses about transistors, voltage regulators and rectifiers. However, without these critical components, the broader semiconductor industry could grind to a halt.

Despite the pertinence to the tech field, few seem to want DIOD based on its valuation. For example, shares trade at only 13.86X trailing-year earnings, below the sector median 29.25X. Also, Diodes prints a revenue multiple of only 1.89X, favorably below 66% of the competition.

Analysts recognize DIOD as a consensus moderate buy with a $71.60 price target. Further, the high-side target lands at $85, implying 25% growth potential.

Amkor Technology (AMKR)

Close-up Presentation of a New Generation Microchip. Gloved Hand Holding Piece of Technological Wonder. Semiconductor stocks are in the news.
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A sector-related product packaging and test services provider, Amkor Technology (NASDAQ:AMKR) is another name among the best semiconductor stocks that doesn’t get many accolades. Again, packaging and testing functions don’t exactly command much pizzazz. However, on the packaging side, Amkor is responsible for protecting computer chips from physical and environmental damage.

Regarding its testing services, the company provides myriad solutions to ensure the quality, reliability and performance of semiconductor chips. Further, with the broader tech space enjoying a significant demand increase from innovations such as artificial intelligence, it’s quite possible that AMKR stock may rise in market value. If so, the current underperformance – losing 6% since the start of the year – may represent a buy-in opportunity.

Enticingly, shares trade at only 18X forward earnings, below the sector median 26X. In addition, AMKR can be had for only 14.25X free cash flow (FCF), below nearly 71% of its peers. Analysts peg shares a moderate buy with a $36.20 price target, implying 21% upside potential.

Himax Technologies (HIMX)

Shipping label of a box from Himax. HIMX stock.
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While I’ve been double, triple and quadruple dipping this company, Himax Technologies (NASDAQ:HIMX) simply ranks as one of the best semiconductor stocks that relatively few folks talk about. A fabless manufacturer, the company specializes in display drivers and other semiconductor products. In particular, it’s a leading provider of display driver integrated circuits (ICs), which are essential components in various display technologies like LCD and OLED.

With so many uses within the consumer electronics and automotive industries, chances are, you’ve interacted with Himax components even if you don’t actively know it. To be fair, though, HIMX stock has suffered due to challenges negatively impacting the consumer economy. As a result, shares lost more than 30% in the past 52 weeks.

Still, it’s also encouraging that in the company’s latest earnings print, it rang up $227.7 million in sales. This tally slightly beat analysts’ expectations of $226.8 million. Robert W. Baird rates shares a “buy” with a $7 price target, projecting over 28% upside potential.

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 Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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