A general recovery in semiconductor stocks and a positive analyst note was the one-two combination Semtech (NASDAQ: SMTC) stock needed to have a good week on the market. The company's share price was almost 19% higher week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence.
A change in semi sentiment
The mid-summer period was hard on many semiconductor stocks and, by extension, numerous titles in the tech sector generally. Fear started to spread of corporate over-enthusiasm for artificial intelligence (AI), which could lead to a great deal of spending, quickly, on the technology. This negative feeling affected semiconductor stocks too, likely because they would face challenges if demand for AI chips suddenly tanked on resulting pullbacks in spending.
This week, that fearful sentiment seemed to change, with some of the top names associated with AI enjoying rallies. Not least of these were chip companies, with bellwether sector names like onetime highflier Nvidia taking to the skies again.
Adding to this bullish feeling for Semtech specifically was a positive note from an analyst tracking the stock. Before market open on Monday, Piper Sandler's Harsh Kumar reiterated his overweight -- buy, in other words -- recommendation on Semtech, and his $60 per share price target. His new research note was based on fresh conversations with management.
Future plans and potential should lead to growth
In that note, Kumar expressed his feeling that Semtech's semiconductor business will see significant improvements for the remainder of 2024 into next year. He also wrote that the company's new management team "is completely committed to the plan of de-levering the balance sheet through divestitures."
Should you invest $1,000 in Semtech right now?
Before you buy stock in Semtech, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Semtech wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $752,835!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of August 12, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
