Cirrus Logic(CRUS) The Motley Fool·2025-04-20 10:37Group 1: Semiconductor Industry Overview - Trade tensions have created opportunities in the semiconductor sector, leading to some chip stocks being undervalued [1][3] - The semiconductor industry has historically generated significant wealth for investors, particularly during technological booms [2] Group 2: NXP Semiconductors - NXP's stock has decreased by 18% in 2025, influenced by trade-related volatility and its reliance on international markets [4][5] - The company derives only 14% of its 2024 revenues from American customers, with 36% from China, making it vulnerable to trade disruptions [5] - NXP's shares are currently trading at 17.5 times adjusted earnings and 14.4 times forward-looking earnings estimates, near two-year lows, indicating potential undervaluation [6] - The market has already priced in a significant slowdown in NXP's business due to tariff tensions, suggesting it may be a good investment opportunity [7] Group 3: Cirrus Logic - Cirrus Logic is trading at 15.5 times adjusted earnings and 12.5 times forward earnings, which are multiyear lows, making it appear undervalued compared to NXP [8] - The company is known for its long-standing relationship with Apple, supplying audio circuits for various devices, but is now expanding its market reach beyond Apple products [9][10] - Cirrus Logic has begun to diversify its client base and product offerings, which may enhance its growth potential despite current market challenges [11]