Monis
Equities Trader, Oversold Reversals & Earnings Plays
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 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
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 is put forward as a stock to own. 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 not an attractive holding because of its historic cyclicality, unless the business has materially changed. 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
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'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 is a lower-risk way to play the photonics volume ramp, since it sells the chips inside transceivers that makers like AAOI build. Q2 upside came from 1.6T qualifying early, and 800G TIA share rose from ~18% to over 50%, with >50% expected at 1.6T by January. Content per transceiver jumps from high single digits to $80-90 at 3.2T, which the market hasn't modelled. The CEO says secured capacity may not be enough for FY28, pricing holds, and gross margin starts near 64%. x.com x.comÂ