Is Cirrus Logic the Hidden Gem in the Semiconductor Sector Waiting to Explode?

Overview of Undervalued Semiconductor Stocks

We have recently compiled a list of 10 Undervalued Semiconductor Stocks to Buy According to Analysts. In this article, we will analyze Cirrus Logic, Inc. (NASDAQ:CRUS) and see how it compares to other undervalued semiconductor stocks that analysts are recommending.

Forecasts in the Semiconductor Market

The global semiconductor market is projected to experience significant growth, with insights from the market intelligence firm IDC predicting a 15% increase by 2025. This growth is largely attributed to the soaring demand for artificial intelligence (AI) and high-performance computing (HPC). Key application markets, particularly cloud data centers, are expected to drive this trend, revealing a promising landscape for semiconductor stocks.

A Surge in AI Demand and Investment Opportunities

Nicolas Gaudois, head of Asia-Pacific technology research at UBS, recently elaborated on this booming market in an interview with CNBC. According to Gaudois, the semiconductor market saw a remarkable 21% growth primarily due to AI-compute demand, while non-AI segments faced a decline. In 2025, he estimates that AI will continue to be the primary growth engine, with a projected 40% increase in demand, alongside a revitalized non-AI market growing by 17% due to advancements in automotive and industrial sectors, inventory restocking, and an increased semiconductor presence in devices designed for edge AI processing.

Identifying Promising Semiconductor Stocks

To determine the ten undervalued semiconductor stocks, a thorough analysis was conducted using stock screening tools, focusing on U.S.-listed companies. Criteria for inclusion included a market capitalization exceeding $2 billion, an anticipated share price upside of at least 10%, and a Forward PE ratio below 30x. This selection process not only highlighted stocks with significant potential but also those favored by top hedge funds.

Why Hedge Fund Interest Matters

Understanding the stocks favored by hedge funds is crucial for potential investors. Research indicates that mimicking the investment strategies of leading hedge funds can lead to superior market performance. For instance, our quarterly newsletter, which selects 14 small-cap and large-cap stocks every quarter, has posted a remarkable 275% return since May 2014, significantly outperforming its benchmark by 150 percentage points. By focusing on these stocks, investors may find lucrative opportunities in the semiconductor space.

Cirrus Logic’s Market Position

Cirrus Logic, Inc. (NASDAQ:CRUS), recognized for its low-power, high-precision audio and mixed-signal processing solutions, has shown significant potential in the semiconductor sector. The company, boasting approximately 3,940 patents globally, has a competitive edge in the marketplace. Recently, Cirrus Logic announced a strategic partnership with Intel to develop a reference design leveraging Intel’s new Core Ultra processors, which will integrate Cirrus Logic’s advanced audio solutions. This collaboration is anticipated to enhance sound quality and efficiency in personal computing devices.

Conclusion: The Future of Cirrus Logic and Semiconductor Stocks

Cirrus Logic stands at an advantageous position, ranking 3rd among our list of undervalued semiconductor stocks recommended by analysts. While there is significant room for growth within CRUS, we believe that AI-driven stocks present even richer investment prospects with quicker return potentials. If you’re interested in exploring compelling AI stocks that trade at attractive earnings multiples, consider checking our detailed report on the cheapest AI stock.

For more insights, you may also want to read about the 20 Best AI Stocks To Buy Now and explore the Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.