We recently compiled a list of the 10 Stocks Hurting From DeepSeek AI News That Could Turn Into Multibaggers. In this article, we are going to take a look at where ASE Technology Holding (NYSE:ASX) stands against the other stocks.
US semiconductor stocks are getting hammered after the Chinese launched an AI model that has many questioning United States dominance in the AI space. China is currently facing restrictions on importing state-of-the-art semiconductor equipment needed for AI training. The launch of DeepSeek AI despite these restrictions is an eye-opener for Western tech companies, and the investor sentiment is reflecting it.
As market participants scamper to gather more information on China’s progress, we decided to look at stocks that are not only taking a hit from this news but also provide an attractive buy-the-dip opportunity. Against the backdrop of Project Stargate, a US government initiative to pump private sector investments into AI infrastructure, these companies also offer a potential multi-bagger opportunity.
Usually, it is the low market cap companies that become multibaggers. However, the failure rate when betting on these companies is quite high. We therefore chose companies with a market cap between $10 and $25 billion. In this way, our list contains businesses that are already established and will thrive on the boost provided by Project Stargate while successfully managing any headwinds. We believe the downside to these stocks is minimal because of the already sound fundamentals of these companies.
A close up of a high-tech chip, intricate details of its single layers visible.
ASE Technology is involved in the testing, packaging, and manufacturing of various semiconductor equipment. It is a Taiwan-based company that also produces substrates and offers software and management services to various industries. The company’s stock is down 5% today.
ASX’s services to the semiconductor industry are what is usually referred to as Outsourced Semiconductor Assembly and Test (OSAT). Despite a struggling environment for such companies, ASX stock gained 14% in the last year. In Q3, the company reported a 10% YoY income growth with a 4% revenue growth. It enjoys better margins than its peers, which is what helps its stock’s stability during tough times.
Apart from the cyclicality risk which most semi-stocks suffer from, ASX has an added geopolitical risk because of its base in Japan. As long as the stock continues to strategically align itself with Taiwan Semiconductor Manufacturing, the geopolitical risk is likely to stay mitigated.