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Semtech Stock Skyrockets Following Analyst Recognition as ‘Hidden Gem’

Semtech (SMTC) soared on Tuesday after an investment bank expressed confidence in the semiconductor company. Baird analyst Tristan Gerra recently recommended Semtech stock as a “bullish fresh pick” in a note to clients, citing the company’s focus on high-performance networking and connectivity semiconductor products and systems as a key driver of its growth potential. With an outperform rating and a price target of 40, Gerra highlighted the upcoming fiscal fourth-quarter report from Semtech, scheduled for late Thursday, as a significant catalyst for the stock.

Gerra’s optimism about Semtech grew following meetings at the Optical Fiber Communication 2024 conference in San Diego. The company is well positioned for the implementation of 800G modules in AI architectures and next-generation optical links like linear drive pluggable optics (LPOs). Describing Semtech as a turnaround success story, Gerra emphasized the company’s new leadership and its emphasis on leveraging strengths in optical networking. 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.

Semtech specializes in high-performance networking and connectivity semiconductor products and systems. The company is poised to benefit from the increased demand for new AI platforms as one of two players qualified for high-density copper interconnect in the market. Despite this positive outlook, Semtech stock closed at 25.17, significantly lower than its all-time high of 94.92 in November 2021. For more stories on consumer technology, software, and semiconductor stocks, follow Patrick Seitz on X (formerly Twitter) at @IBD_PSeitz.

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