4 Surprisingly Cheap Semiconductor Stocks to Buy Now in October (2026)

Parkev Tatevosian, CFA•Oct 1, 2026

Summary

Parkev presents a comprehensive financial analysis of the semiconductor sector, utilizing a Discounted Cash Flow (DCF) approach combined with the Weighted Average Cost of Capital (WACC) and the Capital Asset Pricing Model (CAPM). Parkev notes that the demand for AI-related hardware has created a supply shortage, with many leading firms sold out of inventory through 2025. Parkev calculates that the current market prices of these leaders do not fully reflect their projected long-term cash flow generation.

Broadcom (AVGO): Parkev estimates a fair value of $523 per share, which implies a 48% upside from the current market price of $353. Parkev expects the company's free cash flow to grow from $50 billion in 2026 to $197 billion by 2031, driven by its role in helping giants like Alphabet build custom chips. Parkev previously purchased this stock and expresses a strong interest in buying more shares.

Taiwan Semiconductor Manufacturing Company (TSM): Parkev sets a fair value of $647, representing a 43% upside from the current price of $451. Parkev characterizes the company as the world's premier manufacturer and emphasizes its strategic importance to Apple and Nvidia. Parkev highlights the company's geographical diversification into the U.S., Europe, and Japan as a key factor in mitigating geopolitical risks.

Nvidia (NVDA): Parkev calculates a fair value of $332, suggesting a 47% upside compared to the market price of $225. Parkev projects explosive free cash flow growth, reaching $402 billion by 2030, supported by long-term contracts and pre-payments from a concentrated customer base. Parkev already holds Nvidia in the portfolio and intends to increase the position.

Qualcomm (QCOM): Parkev values the stock at $268, which is 31% higher than the current price of $204. Parkev acknowledges that while the smartphone segment remains a headwind, Qualcomm's expansion into automotive and AI data centers with clients like Meta and Amazon offers significant untapped potential. Parkev does not currently own the stock but expresses interest in initiating a position.

Mentioned Stocks

AVGO

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev calculates a fair value of $523 per share, using a WACC of 11.6% and a beta of 1.22. Parkev believes the stock has over 48% upside from its current price of $353 based on massive projected cash flow growth from $50 billion in 2026 to $197 billion in 2031. Parkev already owns the stock and wants to buy more.

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NVDA

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev sets a fair value of $332 against a market price of $225, implying a 47% upside. Parkev forecasts explosive growth with free cash flow reaching $402 billion by 2030. Parkev already owns the stock and is interested in adding more.

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QCOM

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev values Qualcomm at $268 per share compared to a $204 market price, representing a 31% upside. Parkev notes that while current growth is mediocre, the potential in the data center market with clients like Meta and Amazon makes the risk-reward profile attractive. Parkev is interested in building a new position.

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TSM

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev estimates a fair value of $647, indicating 43% upside from the $451 market price. Parkev views it as the best manufacturing company globally and likes the geographical diversification efforts. Parkev does not own it yet but is very interested in buying.

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