MaxLinear MXL shares soared 12.5% in the last trading session to close at $26.27. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 36.6% gain over the past four weeks.
The optimism surrounding the stock can be attributed to seeing robust traction for MaxLinear’s Keystone PAM4 DSP products, which are ramping at hyperscale customers for 400G and 800G deployments, multiple design wins entering production, expanding presence in AI data centers, and growing demand for storage accelerators, positioning the company to benefit from AI-driven data center buildouts.
This chipmaker is expected to post quarterly earnings of $0.18 per share in its upcoming report, which represents a year-over-year change of +460%. Revenues are expected to be $135.04 million, up 40.8% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For MaxLinear, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MXL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
MaxLinear belongs to the Zacks Semiconductor - Analog and Mixed industry. Another stock from the same industry, Microchip Technology MCHP, closed the last trading session 2.5% higher at $78.76. Over the past month, MCHP has returned 21.5%.
For Microchip Tech, the consensus EPS estimate for the upcoming report has changed +2.4% over the past month to $0.5. This represents a change of +354.6% from what the company reported a year ago. Microchip Tech currently has a Zacks Rank of #2 (Buy).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
