Semiconductors are looking undervalued, thanks to the selloff in some parts of the sector, according to Morningstar. The research firm said in a report released on Oct. 11 that it views semiconductor stocks as 15% undervalued on a median price or fair value estimate basis as of Oct. 3. That's even more undervalued than the wider tech sector, which it believes is 5% undervalued.
Top picks Short-term selloffs in analog and mixed signal chip stocks are "often good times" to buy this subsector, as it has many businesses "that can weather any looming storm," said Morningstar. The firm's top picks in this subsector are Infineon Technologies and NXP Semiconductors . Morningstar said it's particularly bullish about Infineon's opportunities in autos, which make up over 40% of its revenue.
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