Key Takeaways SMTC's low-power, high-speed interconnects position it for AI infrastructure growth across hyperscalers. SkyWater expands with Fab 25 acquisition, but remains exposed to federal spending risks. Shares of SKYT and SMTC are down YTD, but SMTC leads with stronger near-term growth and AI momentum.SkyWater Technology (SKYT) and Semtech Corporation (SMTC) are well-known players in the fast-growing semiconductor market. While SkyWater runs a domestic foundry serving the defense and advanced packagi ...

A month has gone by since the last earnings report for Semtech (SMTC) . Shares have added about 20.2% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Semtech due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Since Then?It turns out, est ...

Shares of Semtech (SMTC) have gained 2.2% over the past four weeks to close the last trading session at $40.23, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $56.33 indicates a potential upside of 40%.The average comprises 12 short-term price targets ranging from a low of $43.00 to a high of $68.00, with a standard deviation of $8.32. While the lowest estimate indicates an inc ...

Industry Overview - The analog/mixed signal semiconductor market is expected to continue growing in 2025, following a strong performance in 2024, despite macro and geopolitical uncertainties, particularly related to China [1][8] - The World Semiconductor Trade Statistics (WSTS) projects an 11.2% growth in semiconductors this year, driven by a 13.4% increase in integrated circuits (ICs) [2] - The Americas are expected to see the fastest growth at 18%, followed by Asia Pacific at 9.8%, Europe at 3.4%, and Japan at 0.6% [3] Market Drivers - Key drivers for growth include artificial intelligence (AI), cloud infrastructure, and advanced consumer electronics [3][15] - The automotive market is influenced by electrification and increased electronics usage in vehicles, with China being a significant driver [5][11] - Industrial end markets are expected to grow due to the adoption of new technologies such as AI, smart cities, and IoT [4] Company Insights - Semtech Corp. (SMTC) focuses on analog and mixed-signal semiconductors for various markets, with a strong emphasis on R&D and margin expansion [28][30] - Semtech's revenue and earnings are projected to increase by 14.2% and 88.6% in 2026, respectively [30] - Analog Devices, Inc. (ADI) is well-positioned for long-term growth with innovative product development and strong customer engagement [33][34] - ADI's revenue and earnings are expected to grow by 12.5% and 15.8% in 2025, respectively [35] Market Performance - The semiconductor industry has experienced a decline of 15.1% over the past year, while the broader technology sector gained 6.4% [23] - The industry currently trades at a forward P/E ratio of 28.21X, which is a premium compared to the S&P 500's 21.86X [26] Geopolitical Factors - Geopolitical tensions, particularly between the U.S. and China, pose risks to the semiconductor supply chain, which is globally distributed [18][19] - The ongoing macroeconomic uncertainties, including high interest rates and tariff concerns, are impacting demand in the industrial end market [13][14]

Core Viewpoint - Semtech Corporation's stock has seen a nearly 9% increase due to renewed optimism from U.S.-China trade talks, although it remains down 33% year-to-date in 2025 [2] Financial Performance - Semtech's quarterly revenues rose 30.1% to $251 million from $193 million a year prior, compared to a 4.8% growth for the S&P 500 [6] - The company's revenue has increased at an average rate of 7.2% over the past three years, outpacing the S&P 500's 5.5% growth [7] - Semtech's revenues expanded 4.7% from $869 million to $909 million in the last 12 months, again against a 5.5% rise for the S&P 500 [7] Profitability Metrics - Semtech's operating income over the last four quarters was $62 million, reflecting a poor operating margin of 6.9%, compared to 13.2% for the S&P 500 [8] - The company's net income was -$162 million, resulting in a net income margin of -17.8%, significantly lower than the S&P 500's 11.6% [8] Valuation Comparison - Semtech has a price-to-sales (P/S) ratio of 3.4, higher than the S&P 500's 3.0 [7] - The price-to-free cash flow (P/FCF) ratio for Semtech is 52.6, compared to 20.5 for the S&P 500 [7] Financial Stability - Semtech's debt stood at $558 million, with a market capitalization of $3.4 billion, resulting in a moderate debt-to-equity ratio of 18.3% [9] - Cash and cash equivalents amount to $164 million of the total $1.4 billion in assets, giving a cash-to-assets ratio of 11.6% [9] Downturn Resilience - Semtech's stock has experienced more severe declines than the S&P 500 during recent downturns, including an 85.4% drop from its peak in 2021 [11] - The stock's performance during past crises indicates a neutral resilience to downturns [14]

Industry Overview - The semiconductor industry is projected to grow from $631.01 billion in 2025 to $958.93 billion by 2030, with a CAGR of 8.73% during this period, driven by demand for AI and data center technologies [2] - Shipment volume in the semiconductor market is expected to increase from 1.40 trillion units in 2025 to 2.29 trillion units by 2030, at a CAGR of 10.32% [3] AMD Insights - AMD's data center revenues surged 57.2% year over year to $3.674 billion in Q1 2025, accounting for 49.4% of total revenues, driven by the adoption of EPYC processors [4] - The launch of the AMD EPYC 4005 Series processors in May 2025 is aimed at enhancing performance and efficiency for small and medium businesses [6] - AMD's partnerships with major hyperscalers like Oracle and Google Cloud have expanded the use of its EPYC CPUs, contributing to its growth [5] Semtech Insights - Semtech's data center revenues reached a record $51.6 million in Q1 fiscal 2026, up 143% year over year, driven by demand for CopperEdge and FiberEdge products [7] - The launch of the CopperEdge portfolio in April 2025 includes solutions that enable 800G and 1.6T connectivity for AI/ML data centers, focusing on power savings and performance [8] - Semtech has strengthened collaborations with cloud service providers, enhancing its position in next-generation data center infrastructure [9] Performance and Valuation - Year-to-date, AMD shares have decreased by 2.8%, while SMTC shares have fallen by 38.5%, attributed to a challenging macroeconomic environment [11] - Both AMD and SMTC shares are currently considered overvalued, with AMD trading at a forward Price/Sales ratio of 5.65X and SMTC at 3.09X [14] - The Zacks Consensus Estimate for AMD's 2025 earnings is $4.02 per share, reflecting a 21.45% year-over-year increase, while SMTC's fiscal 2026 earnings estimate is $1.66 per share, indicating an 88.64% year-over-year increase [16] Earnings Performance - AMD has consistently beaten earnings estimates over the past four quarters, with an average surprise of 2.30%, while SMTC has a higher average surprise of 10.83% [17] - Semtech's stronger earnings surprise history and innovative solutions position it as a more attractive investment compared to AMD [18]

Group 1 - Moretus Research provides high-quality equity research focused on U.S. public markets, aiming to deliver clarity, conviction, and alpha for serious investors [1] - The research framework identifies companies with durable business models, mispriced cash flow potential, and intelligent capital allocation, emphasizing a structured and repeatable approach [1] - Valuation methods are based on sector-relevant multiples tailored to each company's business model and capital structure, prioritizing comparability, simplicity, and relevance [1] Group 2 - Research coverage focuses on underappreciated companies experiencing structural changes or temporary dislocations, where disciplined analysis can yield asymmetric returns [1] - Moretus Research aims to elevate the standard for independent investment research by providing professional-grade insights and actionable valuation [1]

Company Overview - Semtech Corporation (NASDAQ: SMTC) is a provider of high-performance semiconductors, IoT systems, and cloud connectivity services [1] Recent Performance - The stock was poised to return to prices not seen since early 2022 but faced a significant decline in February following an announcement [1]

Semtech (SMTC) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Individual inves ...

Shares of Semtech (SMTC) have gained 9.4% over the past four weeks to close the last trading session at $37.33, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $56.33 indicates a potential upside of 50.9%.The average comprises 12 short-term price targets ranging from a low of $43 to a high of $68, with a standard deviation of $8.32. While the lowest estimate indicates an increas ...