Morningstar flags TSMC, Advantest, SAS as undervalued in chip stock market roundup

Morningstar flags TSMC, Advantest and SAS as undervalued amid broader chip-sector revaluation

June 23, 2026 — Semiconductor stocks with long-term growth drivers remain attractively priced in parts of the supply chain even as the wider chip sector has seen valuations climb, according to a roundup of analyst notes published Wednesday by Dow Jones Newswires.

Morningstar analyst Phelix Lee said in a research note that he likes Taiwan Semiconductor Manufacturing Co., Advantest and Sino-American Silicon Products for their secular growth prospects. TSMC, trading at 22 times its projected 2027 price-to-earnings ratio, “appears undervalued given its dominant foundry position,” Lee wrote. While TSMC’s gross margin trails that of memory maker SK Hynix, the analyst said the Taiwanese foundry’s broader market exposure and unmatched pricing power on cutting-edge chips offer a superior long-term risk-reward profile.

Lee described SAS as “an underrated gem” because its subsidiary GlobalWafers is expanding globally to capture rising demand for silicon wafers, the raw material substrate on which chips are built. Memory stocks, by contrast, are “overvalued,” Lee said, disagreeing with optimistic assumptions that the industry has achieved lower cyclicality.

Getty-OpenAI deal lifts Shutterstock on merger arbitrage

In a separate development, Getty Images shares more than doubled in premarket trading after the visual-content platform announced a display agreement with OpenAI, the Wall Street Journal reported. The deal enables use of Getty Images’ library within ChatGPT to enhance image-based responses. Shutterstock, which is in the midst of a $3.7 billion merger with Getty Images, rose 20% premarket.

“High-quality, licensed visual content makes AI-powered search and discovery more useful and more trustworthy,” Getty Chief Executive Craig Peters said in a statement. “This partnership with OpenAI reflects a shared recognition of that.”

ASML order book full through 2027

Shares of ASML, the Dutch supplier of semiconductor-manufacturing equipment, rose 1.9% to 1,698.4 euros after Bank of America analysts said the company’s order book is likely full for calendar 2027. The company is set to provide an updated outlook when it reports second-quarter earnings on July 15. Higher adoption of ASML’s most advanced lithography machines will allow the company to capture a larger share of customer spending, while manufacturing efficiencies will boost profit margins, the analysts wrote. Slow progress by Chinese competitors also bodes well for ASML, they said. Bank of America raised its price target on the stock to 2,022 euros.

Infineon leads power-semiconductor charge

Infineon Technologies shares gained 5.1% as Bernstein analysts identified the German analog chip maker as the company best-positioned to benefit from surging demand for power semiconductors — the chips that process electricity rather than data. The enormous energy requirements of AI data centers and rising prices for power technology mean Infineon’s core market will expand significantly between now and 2030, the analysts wrote.

“Infineon is a key beneficiary of power semis, given its high exposure and strong market leadership,” the Bernstein team said. They predicted that demand for power semiconductors will outstrip supply, driving up prices and improving Infineon’s pricing power. The analysts increased their forecasts for the company’s adjusted diluted earnings per share and margins over the next three years.

RELX, SGH round out corporate and capital-allocation notes

RELX, the information-and-analytics group, drew cautious commentary from Bernstein analysts ahead of its first-half results due July 23. While the company’s underlying trends appear robust, the analysts wrote, uncertainty remains over the Middle East conflict. RELX had previously indicated that second-quarter events scheduled in the region have been postponed to the second half, and are still expected to take place, though attendance and revenue are projected to decline.

Separately, Macquarie analysts raised their price target on SGH — the industrial conglomerate pursuing a bid for BlueScope Steel — to A$51.25 from A$50.35, citing earnings adjustments. SGH announced a buyback program of up to A$500 million in stock. “A buyback is a credible backstop, but we think M&A intent remains,” Macquarie wrote. The bank said it expects little of the buyback will occur if the BlueScope bid gains momentum. SGH shares were down 0.5% at A$44.33.