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Applied Micro Circuits (AMCC) Poised for Long-Term Growth

On Jun 6, Zacks Investment Research updated the research report on leading computing and connectivity solutions provider Applied Micro Circuits CorporationAMCC .

Headquartered in Sunnyvale, CA, Applied Micro manufactures high-bandwidth low power integrated circuits and semiconductor solutions for the enterprise, telecom and consumer/small medium businesses.

Over the years, Applied Micro has gained a formidable position in the server solutions and wireless market on the back of its advanced and innovative technologies. The company's leadership in mixed-signal design, high-speed signal processing, Internet protocol, Ethernet packet processing and embedded processors allow it to compete and excel in the semiconductor market. In addition, the company's associations with renowned server OEMs are expected to be a growth driver, which will help in augmenting its businesses, going forward. The company expects to witness revenue improvement largely driven by growth of the data center and wireline infrastructures.

Applied Micro's broad portfolio of products and services and continued efforts to provide maximum consumer satisfaction have strengthened its position to warrant a substantial market share. The company's "X-Gene" family of multi-core processors, which are based on 64-bit ARM v8 core, has enabled it to target web servers as well as high-end control and data plane applications.

The X-Weave family of products represents the newest offerings and will serve as the primary growth vehicle in the years ahead. Additionally, Applied Micro's other platforms including Madeira (designed to support data center packet routers and switches), Gearbox (engaged in attaching server chips and racks), PQX (an Ethernet portal), and Packet Pro channel (embedded processor products) are likely to mitigate increasing demand in the industry. The company expects the embedded computer products to continue generating solid revenues in the next 18 to 24 months as it transitions to X-Gene-based embedded products. Furthermore, X-Gene 2 is likely to provide a seamless migration to its existing customers to extend their X-Gene 1 platforms into massive scale-out server systems.

However, Applied Micro's computing segment continues to be adversely impacted by overall business spending cuts as the PowerPC architecture is reportedly in secular decline. Moreover, the company continues to be cautious about the erratic macroeconomic environment, which may impede its growth in the future.

Nevertheless, we remain encouraged by the healthy long-term growth potential of this Zacks Rank #3 (Hold) stock. Some better-ranked companies in the industry include Alpha & Omega Semiconductor, Ltd. AOSL , CEVA Inc. CEVA and Exar Corp. EXAR , each carrying a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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