OpenAI seeks government backing for AI chip investments
Investing.com - Benchmark maintained its Buy rating and $68.00 price target on Semtech Corp. (NASDAQ:SMTC) following the company’s July quarter results. Currently trading at $56.05, the stock has shown strong momentum with a 31% gain over the past six months. According to InvestingPro data, eight analysts have recently revised their earnings estimates upward for the upcoming period.
Semtech delivered solid performance with 20% annual growth and modest upside to consensus estimates on both revenue and earnings per share. The outlook provided by the company showed moderate revenue upside with earnings per share guidance in line with expectations.
The Infrastructure business led the quarter’s strength, with the Data Center segment showing the fastest growth. All major divisions grew both sequentially and year-over-year, marking Semtech’s sixth consecutive quarter of sequential growth.
Semtech is accelerating efforts to divest non-core assets, including its margin-dilutive Sierra Wireless IoT business. The company stated it is carefully evaluating multiple opportunities to maximize shareholder value through these potential transactions.
Benchmark believes such a divestiture would serve as a "material positive catalyst" for Semtech’s stock price, according to the research note.
In other recent news, Semtech Corporation reported a strong performance in its second quarter of fiscal 2026, with revenue increasing by 20% year-over-year and adjusted earnings nearly quadrupling compared to the same period last year. This solid financial result has been highlighted as a "beat and raise quarter" by Piper Sandler, who subsequently raised their price target for Semtech to $65, maintaining an Overweight rating. The firm attributes this positive outlook to the company’s robust performance in its FiberEdge business. Stifel also raised its price target for Semtech to $57, citing the company’s successful execution of its turnaround strategy. They noted that Semtech has improved its business profile and sees potential for additional operating leverage through 2025 and beyond. Both Piper Sandler and Stifel maintain positive ratings on the stock, reflecting confidence in the company’s strategic direction and financial health. These developments underscore Semtech’s ongoing progress and potential for future growth.
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