This semiconductor stock is in the dumps. BMO says it can bounce back
Macom will gain ground as hyperscalers, cloud service providers and others allocate funds toward AI compute, per BMO.
TL;DR
- BMO Capital Markets upgraded Macom Technology Solutions to 'outperform' from 'market perform'.
- The price target was reiterated at $335 per share, indicating a 27% potential upside.
- Valuations have become attractive, with forward multiples decreasing from high-50s to 29x.
- Fundamentals are solid, driven by data center, industrial, and defense sectors.
- Macom's data center revenue is projected to grow 70% in fiscal 2026.
- Space programs are expected to become a material contributor to growth next year.
- Shares have fallen approximately 30% in the last three months due to macroeconomic concerns.
- The company's stock is trading over 30% below its late May peak.
- Wall Street consensus is largely positive, with 13 out of 18 analysts rating MACOM as buy or strong buy.