Most Undervalued Chip Stocks In October 2026: Four Are Cheaper Than The S&P 500
Key takeaways
- Chip stocks are trading cheaper than the S&P 500, but whether that reflects a durable AI‑driven boom or a cautious market stance remains to be seen.
- Micron forward P/E 6.01
- S&P 500 forward P/E 20.30
- Micron market cap $1.18 trillion
What happened
The other three chip names—NXP Semiconductors (NXPI), Qualcomm (QCOM) and Nvidia (NVDA)—also trade at cheaper multiples (14.62, 19.58 and 19.93 respectively) while the broader market remains higher. Micron’s surge is driven by a 211 % jump in DRAM sales and a 140 % rise in average selling prices, pushing its gross margin to 85 % in FY 2026 Q3.
Why it matters
The semiconductor sector is a key engine of U.S. earnings growth, yet the market is pricing it at lower multiples than the overall index. Micron’s record margin expansion and AI‑driven demand suggest a potential shift in the traditional cyclical memory business, while NXP and Qualcomm’s growth in automotive and…
Short-term and longer-term
Short-term. Over the next few days, watch for any earnings guidance revisions or AI‑spending updates that could shift the forward P/E.
Longer-term. Over the next few months, the key question is whether AI demand will become a permanent driver for memory and chip revenue.