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Public Markets Investor, Opportunistic Buying & Cost-Basis Management
Semtech does not deserve its status as a hot optical stock, since it is mostly a low-quality analog business with only a couple of data center parts. The move has been striking, though being wrong is possible. x.comÂ
Semtech's valuation already assumes strong execution, so the stock needs growth to keep pace with a fast-expanding optical market. It is one of the few names with real products across all three AI networking layers, from scale-up copper to scale-out optics chips and, via the HieFo laser deal, scale-across. FY26 data center revenue rose 58% to $223M, with over 50% growth guided for FY27. BofA sees the optical market growing from $14B in 2025 to $73B by 2030, a pace that would ease the multiple. … Show more
Semtech should lead semiconductors higher once yields eventually behave, and $250 within six months would be no surprise. It is resting on support at its previous all-time highs and is no longer screaming cheap, worth about $210, but it has been extremely strong. Management gave incredible visibility into 2027, so the story is somewhat derisked and now comes down to execution. x.com x.comÂ
Some semiconductor stocks have returned to reasonable valuations as fundamentals improve, making recent declines buying opportunities. Many had traded at two to three times their median valuations; the correction brought some back toward normal, while sustained AI spending should benefit suppliers for years. x.comÂ
Semiconductors still look likely to lag on a risk-adjusted basis, even if Treasury intervention such as yield-curve control changes the broader picture. They should have been rallying hard this week and are not acting right for bulls, suggesting something is brewing, probably a capex disappointment. Hyperscalers may be closer to another leg up. x.com x.com x.comÂ
Semtech may see buyers soon as AI and optics stocks are on the run. At 172 the stock sits below its fast zone, and a close below 170 would end the thesis. x.comÂ
Photronics looks overextended, with risks far outweighing rewards after a 170%+ surge to near its all-time high. It trades at 23x earnings on only 4-5% growth, insiders have been aggressively selling, and the chart shows clear bearish divergence. Semiconductor and display markets are highly cyclical, so a slowdown in downstream demand could trigger a sharp pullback. x.comÂ
Semiconductors are cyclical but not bad businesses, because duopolies and oligopolies across the industry earn cyclical super profits and keep growing. A pre-AI McKinsey study found semis have the largest excess profit over expected return on invested capital of any industry. Kuppy is wrong about capital intensity: the industry has shifted to fabless, the most capital-intensive business, TSMC, is a wonderful one, and equipment makers manage supply chains like Apple. x.comÂ
Semtech's damn impressive beat and guidance support an easy 50% upside into early next year. Small-cap semiconductors are unlikely to approach all-time highs by mid-September, though. x.com x.comÂ
Semiconductor sentiment is far too ebullient for a squeeze. Semi short interest is tiny and put-call ratios are about as bullish as they get, so the market shows no disbelief. x.comÂ