Nordic Semiconductor (NOD) Stock: Is This IoT Gem Undervalued?
Nordic Semiconductor (OSE: NOD) has become an increasingly interesting semiconductor stock for investors looking for exposure to the long-term growth of the Internet of Things (IoT), Bluetooth Low Energy, cellular connectivity, and edge AI. After a strong improvement in revenue during 2026, investors are asking whether Nordic Semiconductor is still undervalued or whether its growth potential is already reflected in the share price.
The company delivered a strong second quarter, with revenue of approximately $218.6 million, up 33% year over year, while net income increased 62% to approximately $16.4 million. (Simply Wall St.)
What Does Nordic Semiconductor Do?
Nordic Semiconductor specializes in low-power wireless connectivity solutions used in connected devices.
Its chips and software are found across applications including wearables, smart-home products, healthcare devices, industrial equipment, asset tracking, and other IoT products.
The company's major strength is its expertise in Bluetooth Low Energy, while its portfolio is expanding into cellular IoT, cloud services, power management, and edge AI. (Nordic Semiconductor)
This gives Nordic exposure to a market that could continue expanding as more everyday products become connected.
Strong 2026 Revenue Growth
One of the biggest reasons investors are paying attention to NOD is the company's improving financial performance.
Revenue reached $192 million in Q1 2026, representing 24% year-over-year growth. Nordic then delivered approximately $218.6 million in Q2 revenue, up 33% from the same period a year earlier. (Nordic Semiconductor)
The improvement suggests that demand for Nordic's connectivity products is recovering strongly.
The company has also maintained a gross margin above 50%, which is important for a semiconductor business because higher margins can translate into significant earnings growth as revenue scales.
The nRF54 Platform Could Be a Major Catalyst
Nordic's next-generation nRF54 family is another important part of the investment story.
The company has been expanding its nRF54 portfolio to address ultra-low-power Bluetooth applications and increasingly sophisticated IoT devices.
Edge AI capabilities are particularly interesting.
Instead of sending every piece of information to the cloud, connected devices can increasingly process certain tasks locally. This can reduce latency, improve privacy, and lower power consumption.
Nordic has introduced new edge-AI capabilities designed specifically for small, battery-powered IoT devices. (Simply Wall St.)
Cellular IoT Adds Another Growth Engine
Nordic is also expanding beyond its traditional short-range Bluetooth business.
Its cellular IoT portfolio includes technologies designed for long-range connectivity, while the company is also developing solutions for satellite and non-terrestrial networks.
In August 2026, Nordic announced the global availability of its nRF93M1 smart modem, designed to provide developers with a pre-certified route into Cat 1 bis IoT connectivity. (Nordic Semiconductor)
This expansion could significantly increase Nordic's addressable market over time.
Nordic Cloud Could Become More Important
Another interesting part of the business is Nordic's move toward software and cloud services.
The acquisition of Memfault has helped expand Nordic's cloud capabilities, including device management and firmware-over-the-air services.
This is strategically important because recurring software and services revenue can potentially make a semiconductor company's business less dependent on individual chip sales.
Nordic has also introduced lifetime firmware-over-the-air services designed to help customers manage connected devices and comply with emerging cybersecurity requirements. (Nordic Semiconductor)
Is NOD Actually Undervalued?
This is where investors need to be careful.
Nordic's growth story is attractive, but the stock is not obviously cheap based on every valuation metric.
Recent market analysis has produced a wide range of fair-value estimates. One commonly followed valuation narrative recently placed fair value around NOK 189, compared with a share price around NOK 170 at the time of that analysis. (Simply Wall St.)
Other valuation approaches are considerably more cautious.
This suggests that NOD's valuation depends heavily on assumptions about future revenue growth and margin expansion.
The Biggest Risk: Valuation
Nordic Semiconductor is a growth company, and growth stocks can be sensitive to valuation changes.
If investors expect annual revenue growth above 20% and the company delivers slower growth, the stock could decline even if the business remains profitable.
The company itself has maintained an ambitious long-term goal of achieving average annual revenue growth above 20% through the end of the decade, while targeting a gross margin above 50% and moving toward approximately 25% EBITDA margins. (Nordic Semiconductor)
Those are attractive targets, but they also create high expectations.
Competition Is Another Concern
Nordic operates in a competitive semiconductor industry.
Large chip companies and specialized connectivity providers are constantly developing new solutions for Bluetooth, cellular IoT, Wi-Fi, edge computing, and other applications.
Nordic's strong position in Bluetooth certifications provides an advantage. The company reported 415 new Bluetooth LE designs certified in Q1 2026, with 133 using Nordic components—approximately three times as many certified designs as its nearest competitor, according to the company. (Nordic Semiconductor)
Maintaining that ecosystem advantage will be critical.
Final Verdict
Nordic Semiconductor looks like an attractive long-term IoT growth story, but calling NOD deeply undervalued would be premature.
The company has several powerful catalysts: strong 2026 revenue growth, the nRF54 platform, edge AI, cellular IoT, cloud services, and increasing demand for connected devices.
Its Q2 performance provides encouraging evidence that the business is gaining momentum. (Simply Wall St.)
However, investors must balance that growth potential against valuation, competition, semiconductor cycles, and the ambitious expectations already embedded in the stock.
Bottom line: NOD could be an IoT gem for long-term investors if Nordic successfully converts its technology leadership into sustained revenue and margin growth. At current valuations, however, investors should focus less on the idea that the stock is simply "cheap" and more on whether the company's ambitious growth targets can actually be achieved.
This article is for informational and educational purposes only and is not personalized financial advice.
