1 Analyst says semiconductor stocks are 'hidden AI gems'

user5 days ago

of Artificial intelligence (AI) The revolution is in full swing, and technology giants like Microsoft (MSFT),Amazon (AMZN)Google (Google)Metaplatform (meta)Nvidia (NVDA) began to dominate the scene. But as the impact of AI begins to ripple across multiple sectors and industries, more and more potential winners from the technological revolution are joining the race.

Semtech is one of the lesser known players. (SMTC), has quickly emerged as a beneficiary of this AI boom. The semiconductor company known for its high-performance analog and mixed-signal chips saw its stock price soar a whopping 10% on March 27, just before it announced its fourth-quarter results.

As the AI wave continues to grow, find out how this 'hidden AI gem' is positioned to take advantage of the burgeoning AI market and why analysts are bullish on its prospects. Let's take a closer look.

SMTC stock outperforms

Semtech Corporation valued at $2.26 billion in market capitalization (SMTC) is a California-based semiconductor designer and manufacturer. SMTC has shown outstanding performance this year, 48.9% increase since the beginning of the year – Outperforms the broader S&P 500 index ($SPX)which increased by a large margin of 7.9%.

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However, based on its price to sales ratio of 2.47, the stock is not overvalued at current levels. This not only discounts his SMTC's own five-year average price/sales multiple, but also cheaper than peers such as Silicon Labs. (Slab) and max linear (MXL).

Mark Lin, Semtech's chief financial officer, thinks the stock is a good buy at its current price, given its value.executives scooped up 1,000 shares It acquired SMTC stock for $33.23 each earlier this month. While this isn't the biggest insider buy, when insiders put their money where their mouth is, it's generally seen as a vote of confidence in a company's future.

SMTC sees unexpected turnaround in sales

recently 2024 Q4 Revenue, Semtech, released in late March, reported mixed results. The company reported a loss per share of $0.06 more than expected, but revenue of $192.9 million beat Wall Street's estimate of $191.2 million.

Earnings forecasts were also solid. SMTC expects this quarter's revenue to be in the range of $195 million to $205 million, surpassing sales at the midpoint. Wall Street's average estimate $195.3 million.

Focus on conclusionAnalysts expect Semtech to narrow its full-year loss to $0.09 in 2024 and turn to earnings of $0.66 per share in 2025.

What is driving Semtech's growth?

Beyond AI, Semtech is eyeing growth opportunities in the Internet of Things (IoT) and 5G. Following last year's acquisition of Sierra Wireless, the company foresees even greater potential for his IoT market. A whopping $10 billion by 2027.

And Semtech is being leveraged to deploy 5G Advanced with 25G transceiver chips including: Tri-edge GN2256 lineup, announced at Fiber Optic Communication Expo 2024. And don't forget, Airlink XR60they call it the world's smallest rugged 5G router.

With the growing demand for AI technology, Semtech appears well-positioned to take advantage of the surge in demand for cutting-edge chips across various industries.

What do analysts expect from SMTC?

Analysts are bullish on Semtech's growth potential. Of the 12 experts interviewed, 10 all gave a “strong buy” rating. Some people are being a little cautious with “moderate buying,'' while others are calmly “holding.''

The average price target is $39.15, suggesting a tasty 19.9% upside from Semtech's Friday closing price.And as for Baird Analyst Tristan GuerraCalling Semtech a “hidden AI gem,” he's aiming even higher.

“We believe that Semtech, as one of two qualified players in this space for high-density copper interconnects, is very well positioned to launch new AI platforms in the coming years. ” wrote Gerra. “Semtech is also well-positioned for his 800G module in AI architecture.” The analyst has set a price target of $40, suggesting an expected upside of more than 22%.

SMTC stock conclusion

Semtech Corporation has made a name for itself as a dark horse in the AI and semiconductor space. Earnings forecasts are positive, analysts are optimistic about its prospects, and profitability could be around the corner. With further upside expected, it's definitely worth keeping an eye on this company as it carves out a leading position in the AI game.

On the date of publication, Evebu Jones I had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy for more information. here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Summarize this content to 100 words
of Artificial intelligence (AI) The revolution is in full swing, and technology giants like Microsoft (MSFT),Amazon (AMZN)Google (Google)Metaplatform (meta)Nvidia (NVDA) began to dominate the scene. But as the impact of AI begins to ripple across multiple sectors and industries, more and more potential winners from the technological revolution are joining the race.Semtech is one of the lesser known players. (SMTC), has quickly emerged as a beneficiary of this AI boom. The semiconductor company known for its high-performance analog and mixed-signal chips saw its stock price soar a whopping 10% on March 27, just before it announced its fourth-quarter results.

The surge comes as Baird analysts highlight semtech as a “hidden AI gem.” “A bullish fresh pick.” Analysts gave SMTC an “overweight” rating and a high price target just ahead of the company's earnings release, with upward earnings forecasts prompting fresh buying.As the AI wave continues to grow, find out how this 'hidden AI gem' is positioned to take advantage of the burgeoning AI market and why analysts are bullish on its prospects. Let's take a closer look.SMTC stock outperformsSemtech Corporation valued at $2.26 billion in market capitalization (SMTC) is a California-based semiconductor designer and manufacturer. SMTC has shown outstanding performance this year, 48.9% increase since the beginning of the year – Outperforms the broader S&P 500 index ($SPX)which increased by a large margin of 7.9%.www.barchart.com
However, based on its price to sales ratio of 2.47, the stock is not overvalued at current levels. This not only discounts his SMTC's own five-year average price/sales multiple, but also cheaper than peers such as Silicon Labs. (Slab) and max linear (MXL).Mark Lin, Semtech's chief financial officer, thinks the stock is a good buy at its current price, given its value.executives scooped up 1,000 shares It acquired SMTC stock for $33.23 each earlier this month. While this isn't the biggest insider buy, when insiders put their money where their mouth is, it's generally seen as a vote of confidence in a company's future.

SMTC sees unexpected turnaround in salesrecently 2024 Q4 Revenue, Semtech, released in late March, reported mixed results. The company reported a loss per share of $0.06 more than expected, but revenue of $192.9 million beat Wall Street's estimate of $191.2 million. Earnings forecasts were also solid. SMTC expects this quarter's revenue to be in the range of $195 million to $205 million, surpassing sales at the midpoint. Wall Street's average estimate $195.3 million.Focus on conclusionAnalysts expect Semtech to narrow its full-year loss to $0.09 in 2024 and turn to earnings of $0.66 per share in 2025.What is driving Semtech's growth?Beyond AI, Semtech is eyeing growth opportunities in the Internet of Things (IoT) and 5G. Following last year's acquisition of Sierra Wireless, the company foresees even greater potential for his IoT market. A whopping $10 billion by 2027. And Semtech is being leveraged to deploy 5G Advanced with 25G transceiver chips including: Tri-edge GN2256 lineup, announced at Fiber Optic Communication Expo 2024. And don't forget, Airlink XR60they call it the world's smallest rugged 5G router.

With the growing demand for AI technology, Semtech appears well-positioned to take advantage of the surge in demand for cutting-edge chips across various industries. What do analysts expect from SMTC?Analysts are bullish on Semtech's growth potential. Of the 12 experts interviewed, 10 all gave a “strong buy” rating. Some people are being a little cautious with “moderate buying,'' while others are calmly “holding.''www.barchart.com
The average price target is $39.15, suggesting a tasty 19.9% upside from Semtech's Friday closing price.And as for Baird Analyst Tristan GuerraCalling Semtech a “hidden AI gem,” he's aiming even higher. “We believe that Semtech, as one of two qualified players in this space for high-density copper interconnects, is very well positioned to launch new AI platforms in the coming years. ” wrote Gerra. “Semtech is also well-positioned for his 800G module in AI architecture.” The analyst has set a price target of $40, suggesting an expected upside of more than 22%.
SMTC stock conclusionSemtech Corporation has made a name for itself as a dark horse in the AI and semiconductor space. Earnings forecasts are positive, analysts are optimistic about its prospects, and profitability could be around the corner. With further upside expected, it's definitely worth keeping an eye on this company as it carves out a leading position in the AI game.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/1-semiconductor-stock-thats-a-hidden-ai-gem-according-to-analysts 1 Analyst says semiconductor stocks are 'hidden AI gems'

user5 days ago