Morgan Stanley Downgrades Himax Tech (HIMX) from Overweight to Equal Weight

Himax Technologies Inc. (NASDAQ:HIMX) is one of the hidden AI stocks under $10 to buy. On February 4, Morgan Stanley downgraded Himax from Overweight to Equal Weight while maintaining an $8 price target. This decision was announced amid multiple challenges for display driver integrated circuit vendors.

Morgan Stanley anticipates that softened demand in the computer, smartphone, and automotive sectors, combined with gross margin pressure and a deficiency of new growth drivers, will hinder performance. Furthermore, the firm noted that rising memory costs are expected to create additional headwinds, contributing to continued downside across these primary market segments.

In other news, on January 7, Himax Technologies Inc. (NASDAQ:HIMX) and Vuzix Corp. introduced a lightweight, prescription-ready optical component reference design for AR glasses at CES 2026. This collaboration integrates Himax’s ultra-compact HX7319FL color sequential Front-lit LCoS microdisplay with Vuzix’s high-efficiency waveguide technology to create a power-efficient, scalable solution for OEMs and eyewear makers. By providing a production-ready platform that balances performance and form factor, the companies aim to accelerate the commercialization of all-day wearable AR glasses.

Himax Technologies Inc. (NASDAQ:HIMX) is a fabless semiconductor company that provides display imaging processing technologies in China, Taiwan, Korea, Japan, the US, and internationally. The company operates in two segments: Driver IC and Non-Driver Products.

While we acknowledge the potential of HIMX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.