Semtech’s stock rose on Tuesday following positive comments from an investment bank, with Baird analyst Tristan Guerra recommending it as a “fresh bullish pick.” Despite this, the shares closed at 25.17, well below their record high of 94.92 in November 2021.

Guerra’s optimism about Semtech was strengthened by meetings at the Optical Fiber Communication 2024 conference in San Diego, where the company specializes in high-performance networking and semiconductor interconnect products and systems. Semtech is well positioned to benefit from increased demand for new AI platforms as one of two players to qualify for the high-density copper interconnect market. In addition, the company is well positioned to implement 800G modules in AI architectures and next-generation optical links such as linear drive optics (LPO).

Semtech was described as a turnaround success story by Guerra, who highlighted its new leadership and its emphasis on leveraging its strengths in optical networking. The upcoming fiscal fourth quarter report, scheduled for late Thursday, is expected to be a significant catalyst for the stock. IBD Stock Checkup ranks Semtech No. 17 out of 39 stocks in the fabless semiconductor industry group, with an IBD Composite Score of 40 out of 99.

For more stories on consumer technology, software and semiconductor stocks, follow Patrick Seitz on X (formerly Twitter) at @IBD\_PSeitz.

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