The analyst also noted that Semtech is one of Baird’s top three ideas within its small-cap coverage list.
Semtech Corp. (SMTC), a provider of high-performance semiconductor, Internet of Things (IoT) and cloud connectivity services, reported a quarterly beat Monday after the market closed, prompting a Wall Street analyst to hike his price target for the stock.
Baird Analyst Tristan Gerra upped the price target for Semtech stock to $70 from $50, implying 40% upside potential from its Monday’s close.
The analyst noted that Semtech’s management anticipates robust artificial intelligence (AI)-related forecasts for the remainder of the current year and the next. Among the other management comments highlighted by the analyst are:
- Strong FiberEdge bookings since the beginning of the current quarter
- Two Linear Pluggable Optics (LPO) engagements with U.S.-based hyperscalers, likely contributing to revenue in the calendar year 2026.
- Upward revisions to the assumed LoRa chipset quarterly revenue run-rate to a range of $30 million to $40 million, and the compounded annual growth rate to 15%-20%
LoRa chipsets connect sensors to the Cloud, enabling real-time communication of data and analytics.
Semtech reported adjusted earnings per share (EPS) of $0.41 for the second quarter of the fiscal year 2026, slightly above the guidance’s midpoint of $0.40. Revenue came in at $257.6 million, also above the midpoint of the guidance range.
The Fiscal.ai-compiled consensus called for adjusted EPS of $0.40 and revenue of $256.06 million.
Looking ahead, the company guided to third-quarter revenue of $266 million, plus or minus $5 million, adjusted gross margin of 53%, plus or minus 50 basis points, and adjusted EPS in the range of $0.41-$0.47.
Analysts, on average, estimate revenue of $264.74 million and adjusted EPS of $0.44
Gerra reiterated the ‘Outperform’ rating on Semtech’s stock. “A key growth driver for Semtech remains the AI-driven shift to higher data rates and the push for yearly upgrades in data center connectivity bandwidth,” the analyst said.
The analyst also noted that Semtech is one of Baird’s three top ideas within its small-cap coverage list.
On Stocktwits, retail sentiment toward Baird stock remained ‘extremely bullish’ (84/100) by early Tuesday, and the message volume also was ‘extremely high.’
A bullish user stated that they were buying the stock at its current level ($51) and indicated that they would consider buying more if it dropped for a few days.
Another user was bracing for a gap-up opening on Tuesday.
Semtech stock is down about 18% this year. In Tuesday’s early premarket session, the stock was up about 0.50%.
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