Semtech Corporation’s stock advanced 5.4% in premarket trading on Thursday after Northland Securities upgraded the semiconductor maker to Outperform from Market Perform and set a price target of $182.
The upgrade reflects growing demand for Semtech’s connectivity solutions in artificial intelligence infrastructure, particularly in copper and optical connectivity, Northland analyst Gus Richard said in a note. He highlighted that data center revenue now accounts for 30% of Semtech’s total revenue, with expectations to reach 44% by the end of calendar year 2027.
Richard also noted that gross margins are being driven into the mid-60% range, supported by data center and LoRa revenue growth alongside the divestiture of the company’s cellular module business. The upgrade follows what Richard described as a strong quarterly performance and improved guidance from Semtech.
Separately, Baird maintained its Outperform rating on Semtech and raised its price target to $300 from $225. The firm’s analyst Tristan Gerra did not provide an immediate rationale for the adjustment.
Semtech’s shares were trading at $162.50 in premarket activity, up from Wednesday’s close of $154.20.
