By Doug Busch
Large-cap semiconductor stocks continue to dominate headlines, with Broadcom, Nvidia, and Taiwan Semiconductor now ranking among the world's top 10 companies by market capitalization. Marvell Technology is rallying today on news of a share buyback while Micron moved higher after reporting earnings, though it has since given back most of those gains.
With many large-cap semis trading at all-time highs, investors are turning their attention to smaller, more nimble players. Below, we highlight three opportunities in the semiconductor space, each with a market cap of less than $10 billion.
Allegro MicroSystems, a semiconductor that focuses on the automotive sector, has climbed 44% year to date. After a sharp 135% advance off the early April lows into its July peak, the stock has traded sideways, digesting gains in a healthy manner and now sits 18% off its 52-week high.
On the daily chart, a constructive double bottom base is emerging. Notably, the lows held near the prior cup-with-handle breakout pivot at $27.66, which was cleared on June 4. Investors may want to initiate a position on a breakout above the $33.30 double bottom pivot. A move through that level could set the stage for an advance toward the very round $50 area by mid-2026, a level last touched in 2023.
Allegro MicroSystems traded around $31.50 Wednesday, roughly unchanged.
Qorvo, a diversified semiconductor manufacturer, has advanced 34% in 2025. Round-number theory has played a key role in its recent price action, most notably a 27% drop from the $100 level in October, triggered by a poorly received earnings report. The decline eventually found support at the very round $50 level in early April.
More recently, the $90 area has acted as a key inflection point. Bulls appear to have the upper hand, with price consolidating constructively near this area for nearly three months. The stock now hovers just below a $94.23 breakout level, the trigger of a double bottom base. An entry here is warranted, using a stop below $88 to manage risk.
Qorvo traded about 2% higher Wednesday, around $97.70.
MKS, another semiconductor manufacturer, is up 23% year to date and -- somewhat unusually for a small-cap chip maker -- offers a modest dividend yield of 0.7%. The stock has displayed strong relative strength, doubling off its early April lows and now sits just 3% below its most recent 52-week high.
On the weekly chart, MKSI recently cleared a double bottom pivot at $125.43, part of a base that has / that is been forming over the last 15 months. Longer consolidations like this tend to be successful. Adding to the bullish narrative, the last three weekly closes finished at the top of their range, a sign of institutional accumulation. The stock has produced double-digit gains for two weeks running. A continued move higher could carry this name toward the $150 level by year end.
MKSI traded around $128.30 Wednesday, roughly unchanged.
Write to Doug Busch at douglas.busch@barrons.com
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September 24, 2025 11:03 ET (15:03 GMT)
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