Citrini Research has recently proposed a strategy for identifying promising semiconductor stocks by focusing on those that have yet to see significant price increases. This theory comes on the heels of their earlier work, which highlighted potential disruptions in the software sector due to AI advancements. As the semiconductor industry experiences a shift in momentum—from Nvidia to memory chips like Micron, and now to CPU stocks such as Intel and AMD—Citrini’s approach could help investors capitalize on lagging stocks that remain undervalued.

Currently, only two out of 57 semiconductor stocks with market caps above $300 million have posted negative returns over the past year, with Wolfspeed and Skyworks standing out as potential candidates. Wolfspeed has improved its financial health despite ongoing losses, while Skyworks faces challenges in revenue growth but could benefit from the rise of Edge AI. As AI continues to reshape the market, these laggards may present unique opportunities for savvy investors.

The key takeaway for market professionals is to consider a diversified approach to investing in semiconductor stocks that have yet to benefit from the AI boom, as this could yield significant returns in the coming years.

Source: fool.com