Morningstar Likes Cheap Chip Stocks With Growth Prospects -- Market Talk

Dow Jones11:33

0333 GMT - Morningstar says it likes cheaply-valued semiconductor stocks with secular growth prospects as chip stocks' valuations have become stretched. The brokerage likes TSMC, Advantest and Sino-American Silicon Products, analyst Phelix Lee says in a note. While TSMC's gross margin is lower than that of SK Hynix, its broader market exposure and unparalleled pricing power on cutting-edge chips offer a better long-term risk/reward outlook, he says. TSMC's shares, currently trading at 22 times 2027 P/E, appear undervalued given its dominant foundry position. Meanwhile, SAS could be "an underrated gem" as its subsidiary GlobalWafers is expanding globally to benefit from growing silicon wafer demand. Memory stocks, however, are overvalued, Lee says and disagrees with optimistic expectations of lower cyclicality. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

June 22, 2026 23:33 ET (03:33 GMT)

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