2 Undervalued Chip Stocks to Buy
Here are 2 undervalued tech stocks I’m looking to buy.
avatar
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.
2024-03-16 11:30

2 Undervalued Chip Stocks to Buy
I generally don’t like to tell people to buy certain stocks because if it doesn’t work out, I’m the one who gets blamed. Remember that these articles are my thoughts about the market and are not to be taken as financial advice! I often target undervalued stocks or stocks that haven’t moved like the rest of the markets. This is either a good indicator that they are about to make a move or it allows me to identify things that might be holding that company back.
2 Undervalued Chip Stocks to Buy
So far this year, there has been no shortage of overperforming tech stocks. We all know about NVIDIA (NASDAQ: NVDA) or Super Micro Computers (NASDAQ: SMCI), but what about the other stocks that haven’t received as much love from investors? These are no guarantees, but here are 2 undervalued tech stocks I’m looking to buy.

Taiwan Semiconductor Manufacturing Company (NYSE: TSM)
Wait how can one of the largest and most important companies in the world be undervalued? Well, look at how its peers have traded so far this year and then think about this: without TSMC, none of these semiconductor companies would be able to sell their high-powered chips.

That’s right, TSMC makes most of the powerful AI chips that are fueling the massive sales growth of companies like NVIDIA and AMD (NASDAQ: AMD). TSMC also counts the likes of Apple (NASDAQ: AAPL), Intel (NASDAQ: INTC), Broadcom (NASDAQ: AVGO), and Qualcomm (NASDAQ: QCOM) among its partners. Basically, if you’re a major chip company, you rely on TSMC to make the chips for you.

AI chips are expected to be a multi-trillion-dollar industry in the coming years. On top of all of this, TSMC is trading at way lower multiples than the rest of its peers and the NASDAQ 100 stocks. Shares of TSMC are trading at about 10 times sales and have a forward P/E of 21. For a company that has a 5-year revenue CAGR of 16%, we should see those multiples continue to compress and the market capitalization of the company rise. Finally, TSMC even pays a dividend to its shareholders. The most recent distribution was announced to be $0.54 per share, giving it a yield of about 1.5%.

Micron Technology (NASDAQ: MU)
Micron is another semiconductor stock that doesn’t get much love from investors. Ahead of its earnings next week, it certainly is getting love from analysts! Micron received two analyst upgrades this week with new price targets of $120 and $150.

It is an AI-related chip stock so it should get a healthy bump, especially if it beats expectations and raises full-year guidance. I’m interested in Micron because it’s only gained about 13% year-to-date and is trading at just 6.3 times sales and 10.05 trailing earnings. Those are pretty cheap multiples for a growth stock that deals with AI. This earnings call might be the last time it trades under $100 for a while so add Micron to your list of stocks that are undervalued and worth picking up!


Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

Rate this article

positive
negative
Published On
2024-03-16 11:30

avatar
About the Author
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.


buy-coffee
You've read 1 article in the last year
..thank you for supporting us and for visiting our site. Unlike many other sites, The Dog of Wall Street is available for everyone to read. Our focus is to provide great content for free. Do you like what we are doing? Buy us a cup coffee. It is the fuel that keeps us going..

Is Tesla Back? Has TSLA Stock Finally Bottomed?
Tesla Stock Analysis: Robo Taxis to the Rescue?
By Mike Sakuraba | 2 weeks ago

2 Stocks to Buy During an April Pullback
Here are 2 stocks I’d buy during an April pullback.
By Mike Sakuraba | 2 weeks ago

TSM Stock: Is This The True Winner of the AI Race?
TSM’s stock has gained nearly 40% this year which is about half of NVIDIA has returned.
By Mike Sakuraba | 2 weeks ago

Best Proxy for Bitcoin: Coinbase or IBIT
In this article, we’ll compare the iShares Bitcoin Trust to Coinbase to see which is the best proxy for Bitcoin on the stock market.
By Mike Sakuraba | 3 weeks ago

2 Under the Radar AI Stocks to Buy
If you’re tired of reading about NVIDIA, consider these two AI stocks to add while the chip market cools off.
By Mike Sakuraba | 3 weeks ago

3 Bold Predictions for the Second Quarter
So here’s what I’m expecting for the second quarter and I’ll throw in a couple of bold predictions as well!
By Mike Sakuraba | 3 weeks ago

2 Stocks Cathie Wood Keeps Buying That You Should Too
In the world of retail investing, Cathie Wood and her Ark Invest fund are extremely polarizing.
By Mike Sakuraba | 4 weeks ago

2 Under the Radar Stocks to Buy Before Others
One of the keys to investing has always been to identify weaknesses in stocks before others. Buy it when everyone hates it and when everyone loves it you’ll reap the rewards. Sounds easy enough right?
By Mike Sakuraba | 4 weeks ago