Semtech Stock Skyrockets Following Analyst Recognition as ‘Hidden Gem’

Baird Bullish on Semtech: Hidden Gem in Optical Networking Market, IBD Ranks it High

Semtech (SMTC) experienced a surge in stock prices on Tuesday following an investment bank’s endorsement of the semiconductor company. The firm identified Semtech as a “hidden gem” and recommended it as a “bullish fresh pick” to clients. Baird analyst Tristan Gerra has an outperform rating on the stock with a price target of 40, despite a positive outlook. However, Semtech closed at 25.17, below its all-time high of 94.92 in November 2021.

Gerra’s optimism about Semtech was fueled by his attendance at the Optical Fiber Communication 2024 conference in San Diego. Semtech specializes in high-performance networking and connectivity semiconductor products and systems, and is well positioned for increased demand for new AI platforms as one of two players qualified for high-density copper interconnect in the market. Additionally, Semtech is well positioned for the implementation of 800G modules in AI architectures and next-generation optical links like linear drive pluggable optics (LPOs).

Semtech was described by Gerra as a turnaround success story due to its new leadership and focus on leveraging its strengths in optical networking. The upcoming fiscal fourth-quarter report from Semtech, scheduled for late Thursday, is expected to be a 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.

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