Even Nvidia Has Been Losing to This Unknown Chip Stock With 300% Upside

People who want to outperform Nvidia (NASDAQ:NVDA | NVDA Price Prediction) usually buy stocks like Broadcom (NASDAQ:AVGO) or AMD (NASDAQ:AMD), but this stock may be a smarter choice for you, and you’ve probably never heard of it. It’s called ACM Research (NASDAQ:ACMR). ACMR stock has already outperformed NVDA stock by a wide margin in the past year (up 161% vs 75%), and I believe it is set to keep up the rally.

There’s a cross-border valuation disconnect at play here, which is very interesting and worth looking into. The disconnect is why I believe the stock still has 300%-plus upside.

But first, let’s take a look at what this business does before valuing it.

ACMR is a solid AI hardware play

ACM Research sells specialized equipment for semiconductor manufacturers to process silicon wafers during chip production. The company is based in the U.S, but it derives most of its revenue from China, both directly and indirectly. Its wafer tools are needed to clean chips with extreme precision.

ACM says a substantial majority of its product development, manufacturing, support, and services are in mainland China, and to date, substantially all of its semiconductor equipment sales have been to customers located there. You’re getting direct exposure to China’s enormous AI buildout. It is also benefiting from the U.S. buildout as the company is investing in Oregon to double its U.S. employee base.

This will immediately spook some of you. Yes, I do agree that there is some China risk, but it is substantially lower than most other semiconductor companies that sell to China. Here’s why.

ACM Research’s valuation disconnect and the 300% upside potential

While ACM Research sells to China, it does so mostly indirectly. ACM Research owns 73.7% of ACH Research (Shanghai), which also trades on the Chinese public market.

Not only does this structure give it a commercial advantage in China, but it’s also mainly why I see massive upside potential.

ACM Research (Shanghai) trades at CNY 72.66 billion, or $10.64 billion USD. So, ACMR’s stake here is worth some $7.9 billion. ACMR on the U.S. market has a market capitalization of just $3.2 billion.

Kerrisdale Capital called this out back in January 2025. It saw a “10-bagger” potential here.

It’s not just the valuation disconnect

There’s more to like about ACM Research than the disconnect above. Even if you completely ignore that ownership, the stock still trades at 27 times forward earnings and has a massive growth runway in the coming years.

Analysts expect revenue to grow at 23% annually in the coming years, along with 52% annual EPS growth rate (minus non-recurring items). In fact, the PEG ratio is at just 0.64x, which is cheaper than 91% of semiconductor stocks.

If that’s not enough, take a look at the balance sheet.

This is a business that holds $1.16 billion in cash with $298 million of debt. Again, the market cap is just $3.2 billion, so this is an enormous pile of cash.

I see big upside

ACMR stock is off 32% from its high this year. I expect a reversal in the coming years, which could hand you 50%-plus upside by the time 2026 ends. This is if semiconductor stocks keep gaining and the broader environment remains bullish. The average analyst sees 46.4% upside potential in the next 12 months.

And even if things do go wrong, this company gives you more cushion than almost any other chipmaker of this size. The cash cushion alone is a third of the market cap, so I see little downside risk after the selloff that has already happened.

My bull case is that ACMR stock can end the year at or above $80 as more investors realize all the pros here.