• Tariffs have sparked a drastic 20% market correction.
  • As a result, some tech stocks now look undervalued relative to their prospects for growth.
  • We recommend three—Marvell Technology, NXP Semiconductors and Onto Innovation.


Not long ago, we predicted fear of recession could cause market volatility to surge to multi-year highs. Now, it’s come to pass because of President Trump’s tariffs. The major market indices have entered bear market territory, and the Cboe Volatility Index (VIX) has closed above 40, its highest level since 2020.


History shows such conditions can create buying opportunities, whether you’re looking for a short-term bounce or planning for long-term growth. Either way, three tech stocks stand out—Marvell Technology (MRVL), NXP Semiconductors (NXPI) and Onto Innovation (ONTO). They’re all trading at more attractive valuations than we’ve seen in some time and have strong potential in AI, automotive chips and advanced semiconductor packaging.


We rate Marvell as a “buy”


Despite its prominence in semiconductors, Marvell Technology has seen its stock price plummet nearly 45% in the past month. The decline followed a disappointing earnings report and guidance that fell short of investors’ high expectations. But despite these short-term setbacks, the company’s long-term potential for growth remains intact, particularly in data centers and AI-driven markets. In its fiscal fourth-quarter results, it posted a solid 27% year-over-year increase in revenue, underscoring its resilience.


At the core of Marvell’s innovation are its advanced computer chips, which power everything from data centers to networking and storage. Expertise in creating custom chips, known as application-specific integrated circuits (ASICs) sets the company apart. Unlike general-purpose chips, ASICs handle specialized tasks with greater efficiency and speed for a competitive edge in high-demand markets. Recent earnings reports reflect growing optimism for its data center and AI segments, which continue to drive demand. Looking ahead, the company is poised for sustained growth and projects its data center division will bring in $15 billion in annual revenue by 2028.


From a valuation standpoint, Marvell presents a mixed but intriguing picture. The company’s P/E ratio of 19.8 is just above the sector median of 19.0, but considering the company’s strong growth potential in the burgeoning AI sector, this slight premium is arguably warranted. While its price-to-sales (P/S) ratio is notably high at 8.3—compared to the sector average of 2.6—this reflects the company’s impressive growth trajectory and leadership in cutting-edge technology. What stands out even more is the overwhelmingly positive sentiment from analysts, with 33 of the 39 covering the company rating its stock as “buy” or “overweight.” The average price target for Marvell shares sits at $115, well above the current price of about $50.


We rate Marvell as a “buy” below the $50 per share, with the stock’s current discount presenting an attractive entry point. If the stock continues to dip, it would likely become a “strong buy,” with the combination of an appealing P/E ratio and compelling long-term prospects in custom silicon and AI positioning it for success. The current market sell-off has driven the stock lower, but this pullback seems overdone, making the stock an appealing opportunity for long-term investors.


NXP Semiconductors offers long-term potential for growth


NXP Semiconductors has suffered a 25% drop in its stock price over the past month, following a weaker-than-expected outlook for the first quarter of 2025. The company’s Q1 revenue forecast, which fell short of analysts’ expectations, reflected softening demand in the automotive and industrial sectors. While this short-term weakness has weighed on the stock, NXP remains dominant in semiconductors, with emphasis in the automotive business. Despite challenges, the company is poised to capitalize on long-term growth drivers, particularly in emerging areas like software-defined vehicles (SDVs) and radar systems. The recent sell-off has created a compelling opportunity for investors, as its stock now looks increasingly attractive from a valuation standpoint.


NXP’s automotive segment, which accounts for more than half of its revenue, continues to serve as a primary driver of growth. While short-term headwinds have affected performance, the company’s strategic focus on SDVs, radar systems and electrification positions it to capture a larger slice of the expanding automotive semiconductor market. Its acquisition of TTTech Auto strengthens it in safety-critical automotive software and solidifies its competitive edge. As demand accelerates for autonomous driving technology and advanced driver-assistance systems (ADAS), its portfolio of automotive connectivity is well-positioned for continued expansion. Additionally, a solid presence in China’s automotive industry provides an added layer of resilience and a foothold in one of the world’s largest and most dynamic markets.


From a valuation perspective, NXP stands out as an appealing investment opportunity, with its relatively attractive earnings multiple as a key differentiator. The company’s P/E ratio of 17.6 is notably lower than the sector median of 25.4, suggesting it is trading at a discount compared to its peers. This relatively low P/E ratio underscores the market’s underappreciation of the company, considering its strong growth potential in high-demand markets like automotive semiconductors and industrial technology. Investors often look for lower P/E ratios as an indication of value, particularly when the company has substantial growth prospects that could lead to improved earnings.


While NXP’s price-to-sales (P/S) ratio of 3.5 is higher than the sector average of 2.6, this premium is justified by the company’s strong growth trajectory, particularly in SDVs and ADAS, which are poised to drive growth in revenue. Its price-to-book (P/B) ratio of 4.8 is on par with its peers, demonstrating the value of the company’s robust portfolio of semiconductor products and technology.


Despite short-term challenges in demand, analysts remain overwhelmingly positive about the stock, with 27 of 34 analysts rating it as a “buy” or “overweight.” The average price target of $250 per share suggests considerable upside potential from the current $160. We view it as a strong buy, given solid long-term prospects in automotive and IoT (internet of things) markets. But if the stock were to move lower, it would arguably present an even more compelling investment opportunity.


Onto Innovation


Stock in Onto Innovation has dropped 24% in the past month, presenting investors with a compelling buying opportunity. While Onto may not be a household name like industry giants such as Marvell or NXP, the company has delivered impressive growth in recent years. The company’s latest Q4 earnings report showed a 21% year-over-year increase in revenue, along with a robust 42% rise in earnings per share (EPS). With the stock now priced at $105—well below the 52-week high of $238 per share—the company appears undervalued, particularly with its strong fundamentals and attractive long-term potential for growth.


Onto Innovation plays a critical role in semiconductors, providing advanced process control and metrology components essential for high-performance chips. The company has seen strong growth, especially in its Specialty Devices & Advanced Packaging segment, which now accounts for 64% of total revenue. This growth is driven by rising demand for AI-driven packaging and power devices, particularly in the SiC semiconductor market, which is critical to electric vehicles (EVs). Onto’s cutting-edge products, like EchoScan and 3DI, ensure precision in semiconductor manufacturing. With major customers, such as Taiwan Semiconductor Manufacturing (TSM) and Samsung (SSNLF), expanding production, the company is poised to enjoy increased demand, reinforcing its potential for sustained growth in this high-demand niche.


From a valuation standpoint, Onto offers an attractive investment opportunity. With a forward P/E ratio of 20.7, the company is priced competitively compared to the sector median of 23.5, reflecting solid growth potential without the premium typically seen in higher-risk tech stocks. Its P/S ratio of 5.5 is higher than the sector average of 2.6, but this premium is justified by Onto’s leading position in the high-growth semiconductor process control market. Onto’s P/B ratio of 2.7 is below the sector median of 2.8, indicating the stock is trading at a reasonable multiple, considering its low debt and strong cash reserves.


Perhaps most compelling, Onto has earned the unanimous support of analysts, with all 10 analysts covering the stock rating it as a “buy” or “overweight.” The average price target of $230 per share suggests considerable upside from the current price of $105. Given the company’s strong growth trajectory, financial stability, and competitive advantages in key sectors like AI and power semiconductors, we view the stock as a “strong buy” at or below $100 per share. If the price drops further, it would be even more compelling because of its attractive valuation and the strong outlook for its products in high-growth markets. 


Takeaways


The rapid correction in the major market indices has sent shockwaves through the tech sector, but it has also reset valuations, creating opportunities for long-term investors. While short-term volatility may remain a concern, the pullback in prices has made many high-growth tech stocks more attractive, particularly those with strong fundamentals and clear long-term growth trajectories. Companies like Marvell, NXP Semiconductors and Onto Innovation, which have all faced recent stock price declines, now present compelling value, especially with their leading positions in high-growth sectors.


As the broader market stabilizes, investors may want to focus on companies with a clear edge in key areas of innovation, whether it’s Marvell’s custom silicon, or the industry-leading graphics processing units (GPUs) of Nvidia (NVDA). With their valuations reset and analysts mostly bullish, these companies offer attractive entry points for those looking to capitalize on a market rebound. Amid the turbulence in stock prices, investors should also remain mindful of risk management and can review these tips for trading volatile markets. 


Andrew Prochnow
, Luckbox analyst-at-large, has more than 15 years of experience trading the global financial markets, including 10 years as a professional options trader.

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