Semtech stock jumped Tuesday after the chipmaker delivered a beat-and-raise earnings report, helped by strong data center demand.
The Camarillo, Calif.-based company late Monday said it earned an adjusted 41 cents a share on sales of $257.6 million in its fiscal second quarter ended July 27. Analysts polled by FactSet had expected earnings of 40 cents a share on sales of $256.1 million. On a year-over-year basis, earnings rocketed 273% while sales advanced 20%.
For the current quarter, Semtech expects to earn an adjusted 44 cents a share on sales of $266 million. That's based on the midpoint of its guidance. Wall Street was modeling earnings of 44 cents a share on sales of $264.7 million. In the same quarter last year, it earned an adjusted 26 cents a share on sales of $236.8 million.
On the stock market today, Semtech stock popped 15.1% to close at 58.72.
Semtech makes high-performance semiconductors, Internet of Things and cloud connectivity systems.
Semtech Stock Gets Price-Target Hikes
"We continue to see data center sales (copper and optical related) benefiting from the rising demand for AI workloads as well as expanding customer bases, while industrial orders should improve due to upside from LoRa-enabled solutions," CFRA Research analyst Angelo Zino said in client note. He rates Semtech stock as buy with a price target of 65.
At least five Wall Street analysts raised their price targets on Semtech stock after the fiscal Q2 earnings report.
Piper Sandler analyst Harsh Kumar reiterated his overweight, or buy, rating on Semtech stock and upped his price target to 65 from 55.
"Semtech's core business remains strong and largely driven by the growth in the data center portfolio," Kumar said in a client note. He sees multiple growth drivers in the data center business around emerging connectivity products.
Semtech stock is on the IBD Tech Leaders list. It has an IBD Composite Rating of 95 out of 99, according to IBD Stock Checkup.
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