Vlad Bastion
Founder of Investment Bastion, Systematic Stock Ratings & Algorithmic Portfolios
Semtech benefits as larger AI clusters need faster, more efficient links between GPUs and switches, which its CopperEdge and FiberEdge chips supply. Data center revenue rose 91% year over year. The stock keeps setting all-time highs despite a broad semiconductor sell-off and tops US semiconductors by Momentum Score at 99, ahead of AMD and NVIDIA. x.comÂ
Semtech remains a Buy with a $162 target at 22x FY28 EPS, as AI demand runs about three times its supply capacity. F2Q revenue rose 33% YoY to $341.9M, EPS of $0.71 beat $0.61, gross margin hit a record 54.5%, and F3Q guidance of $410M revenue and $1.02-1.08 EPS tops estimates. 1.6T CopperEdge ACC is now in mass shipment to major hyperscalers, and FiberEdge targets over 50% of its 1.6T market by end-FY27. SiGe/InP wafer and packaging limits are the bottleneck; FY28 EPS is forecast at $7.40. … Show more
Semtech is put forward as a stock to own. x.comÂ
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 low-power chips connect AI clusters and are hard to replace once designed in. The stock is breaking out, with quarterly relative performance back at highs and about 20% to go to the 1.618 Fibonacci extension. x.comÂ
Semtech is forming one of the strongest cup patterns in semiconductors, backed by AI data-center networking and optical connectivity exposure with accelerating revenue and EPS growth. The stock is now pushing up the right side of a massive multi-month base. 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 benefits from Nvidia's strategy of scaling up with copper for as long as possible. At Computex 2026, Jensen Huang said to use copper wherever you can and optics only where you must. Nvidia's Blackwell NVL72 racks use thousands of copper cables rather than fiber to link GPUs within a rack, and keeping data intact over that copper relies heavily on signal-integrity chips from Semtech's active copper cable alliance. x.comÂ
Semtech is gaining share in a growing market, with content per unit about to jump and a higher-margin business left after its divestiture. FiberEdge's 800G share rose from 18% to over 50% as transceiver units roughly tripled, and it expects over 50% of 1.6T this year. Content per transceiver rises from high single digits to $80-90 as the industry moves to 3.2T in 18-24 months. Gross margin should start at 64% after the cellular module sale, versus 53% two quarters ago. x.comÂ
A rising value of compute per watt should benefit AI cloud, chip, connectivity and power suppliers. Elon Musk says that value will rise over time. Nebius has Microsoft and Meta deals; Marvell benefits from custom silicon demand; Credo connects GPUs; Vistra has long-term nuclear supply deals with Amazon and Meta; Nokia's Nvidia partnership could help it capture data-center networking growth. x.com x.comÂ
AI data-center spending flows beyond GPUs and operators into networking, optics, power and cooling. Nvidia, AMD, Broadcom and Marvell supply chips; Arista, Nokia and Credo connectivity; Applied Optoelectronics and Lumentum optics; Vistra, Constellation and Bloom power; Vertiv and Modine cooling. Meta's $140B spending this year illustrates the scale, per a commenter with whom the point is agreed. x.com x.comÂ
