Semtech Stock Skyrockets Following Analyst Recognition as ‘Hidden Gem’

An investment bank has expressed confidence in Semtech (SMTC) after identifying the semiconductor company as a “hidden gem.” Baird analyst Tristan Gerra recently recommended Semtech stock as a “bullish fresh pick” in a note to clients, with an outperform rating and a price target of 40. Despite the positive outlook, Semtech stock closed at 25.17 on Tuesday, significantly lower than its all-time high of 94.92 in November 2021.

Gerra’s optimism about Semtech grew following meetings at the Optical Fiber Communication 2024 conference in San Diego. The company specializes in high-performance networking and connectivity semiconductor products and systems, and is well positioned for the implementation of 800G modules in AI architectures and next-generation optical links like linear drive pluggable optics (LPOs). Additionally, Semtech is one of two players qualified for high-density copper interconnect in the market, which could provide a significant boost to the company’s growth prospects.

Describing Semtech as a turnaround success story, Gerra highlighted the company’s new leadership and its emphasis on leveraging strengths in optical networking. The upcoming fiscal fourth-quarter report from Semtech, scheduled for late Thursday, is expected to be a significant catalyst for the stock. IBD Stock Checkup ranks Semtech at No. 17 out of 39 stocks in the fabless semiconductor industry group, with an IBD Composite Rating of 40 out of 99.

For more stories on consumer technology, software, and semiconductor stocks, follow Patrick Seitz on X (formerly Twitter) at @IBD_PSeitz.

By Aiden Johnson

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