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Investing.com - Needham has raised its price target on MACOM Technology Solutions (NASDAQ:MTSI) to $175.00 from $150.00 while maintaining a Buy rating on the semiconductor company. The stock is currently trading at $166.83, already surpassing its previous 52-week high of $154.86. According to InvestingPro data, the semiconductor firm has a market capitalization of $12.49 billion and appears to be trading above its Fair Value.
The price target increase follows MACOM’s recent earnings report that exceeded expectations, with the company delivering stronger revenue, improved gross margins, and lower operating expenses than anticipated. The company posted a gross profit margin of 54.76% in the last twelve months, with InvestingPro data showing that six analysts have recently revised their earnings expectations upward.
Needham projects MACOM’s fiscal year 2026 revenue to grow in the mid-teens percentage range year-over-year, with the Data Center segment leading this growth. The firm expects this revenue expansion to drive even faster earnings growth through increased operating leverage. This outlook aligns with MACOM’s recent performance, as InvestingPro data reveals the company achieved impressive 33.5% revenue growth in the last twelve months, with analysts forecasting an EPS of $3.53 for fiscal year 2025.
The research firm highlighted that MACOM’s Data Center strength is expected to continue throughout fiscal 2026, driven by 200G per lane products for 1.6T applications. Notably, three customers are now in production for MACOM’s 800G LPO solutions, with additional customers expected to join during the year.
Needham also anticipates MACOM’s gross margin to increase by 20-50 basis points each quarter in fiscal 2026, which contributed to the firm’s decision to raise its gross margin estimates and ultimately its price target.
In other recent news, MACOM Technology Solutions reported its fourth-quarter earnings for fiscal year 2025, exceeding market expectations. The company announced an adjusted earnings per share of $0.94, which surpassed the forecast of $0.929. Revenue was reported at $261.2 million, slightly above the anticipated $260.17 million. Following these results, Truist Securities raised its price target for MACOM Technology Solutions from $158 to $180, maintaining a Buy rating on the stock. This adjustment was influenced by the company’s solid third-quarter results and a favorable fourth-quarter outlook. The improvements in gross profit margins have helped to balance previous challenges, particularly those related to the recently-acquired RTP fabrication facility. These developments reflect the company’s ongoing efforts to enhance its financial performance. Investors will likely continue to monitor MACOM’s progress in the coming quarters.
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