Investing in electric vehicle (EV) stocks is becoming increasingly popular as the EV market grows. Many investors are looking for undervalued EV stocks that have the potential to increase in value in the future. This article will examine some of the most undervalued EV stocks on the market, and discuss their potential as long-term investments. We will also explore the various use cases of these stocks and how they may be able to provide investors with a profitable return on investment.
As EVs become more popular, undervalued EV stocks have become attractive for investors looking to capitalize on this trend. Undervalued EV stocks offer an excellent opportunity to invest in companies well-positioned to benefit from the growth of electric vehicles. With the proper research and analysis, savvy investors can find undervalued EV stocks that offer excellent returns over time. Investing in undervalued EV stocks is a terrific way to expand your investing horizon, and profit from the growing demand for electric vehicles.
Although this sector is on the rise, many investors are still hesitant to invest in EV stocks.
However, those who take the time to research and understand the potential of EV stocks can find tremendous growth opportunities. By investing in undervalued EV stocks, investors can benefit from a higher return on their investment than most other sectors.
This article looks at the companies focusing on producing chips for electric vehicles. Since chips are essential in making EVs, these chip makers hold a crucial position in the EV industry. To reflect this, here is an exclusive list of chip manufacturers to buy right now.
NXP Semiconductors (NXPI)
NXP Semiconductors (NASDAQ:NXPI) is a global leader in designing and manufacturing advanced semiconductor solutions. Founded in 1953, the company has become one of the most significant semiconductor components and systems suppliers worldwide. NXP’s products are used in various applications, from automotive to consumer electronics, industrial automation, medical devices, and more. With its innovative technologies, NXP is helping to shape the future of connected devices and smart cities.
NXP has displayed strong design capabilities, creating products that customers stick with due to the massive costs associated with replacing them. Once integrated into a device, it is doubtful that one of its products would be taken out. Importantly, the company focuses on four main segments – automotive, industrial, and Internet of Things, mobile, and communication infrastructure.
Cars today are equipped with semiconductors to help manage engines, provide navigation, offer infotainment features, and control other visible features. Thus, NXP is in a great place as consumer needs continue to increase. And automotive companies aren’t backing out from orders despite the delay in chip delivery. This environment will ensure NXP’s long-term success.
After experiencing positive growth early in the year, NXPI stock has dipped recently. This comes after the company’s revenue forecast for Q1 failed to meet analyst predictions. Consequently, value investors will find this opportunity enticing. Indeed, NXP is among the best undervalued EV stocks right now, in my view.
Intel (NASDAQ:INTC) witnessed a significant decrease in revenue, with the company bringing in only $14 billion during the fourth quarter of the year. This downturn is primarily attributable to the slowing PC and server market. Consequently, Intel’s net income fell by 32% compared to last year.
To combat the economic downturn, Intel is taking measures to cut back on expenses. This includes reducing its staff and limiting spending. This is all in an effort to reach a goal of trimming $3 billion in costs by 2023 and up to $10 billion by 2025.
Intel’s adjusted gross margin declined to 43.8%. Meanwhile, its adjusted net income fell by 92% to only $394 million or 10 cents per share. Wall Street was taken aback by the results, as it had expected Intel to deliver earnings of 20 cents per share.
As a result, it looks like Intel will continue to face some difficulties. Its projections show revenue will drop to between $10.5 billion and $11.5 billion in Q1 2023. Thus, the chip giant is projecting an adjusted loss of 15 cents per share for this coming quarter.
All of these reasons are why Intel, with a juicy dividend yield of 5.2%, finds itself in the position it’s in. Intel CEO Pat Gelsinger has predicted that the automotive chip market will reach $115 billion by 2030, motivating Intel to create a chipmaking division focused on the car industry.
Nevertheless, the company’s latest figures indicate some pain in the future for Intel. A proven performer, Intel finds itself on the ropes. However, its record suggests that the company has the potential to make a comeback.
Microchip Technology (MCHP)
Microchip Technology (NASDAQ:MCHP) is a leading microcontroller and analog semiconductor product provider. The company designs, manufactures, and markets various integrated circuits (ICs) used in multiple applications, including automotive, consumer electronics, medical devices, aerospace, industrial automation, and more. In addition to its core offerings in microcontrollers and analog ICs, Microchip also offers development tools. With its expansive product portfolio and strong presence in the industry, Microchip Technology looks in great shape to maintain its position as a leader in the semiconductor market for years to come.
Microchip enjoys a vast economic advantage because of intangible assets like non-replicable chip designs and specialized manufacturing skills. Furthermore, customers tend to find it difficult to switch away from the company due to high switching costs.
Microchip has demonstrated impressive financial performance over the past few years. As a result, it has managed to stay ahead of its competitors in microcontrollers and expand its analog business. That sets up the company nicely for the next two decades.
A microchip is a big player in automotive and IoT chipsets. Strong industry tailwinds suggest it will continue to report strong financial performance in 2023 and beyond. As CEO Steve Sanghi observed, Microchip’s sales are mainly driven by industrial, automotive, aerospace and defense, data center, and communications infrastructure end markets – which collectively account for 86% of total sales. These verticals are performing well and continue to be strong. Hence, it becomes hard to avoid undervalued EV stocks when discussing this name.
On the publication date, Faizan Farooque did not hold (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.