Semtech is a “hidden AI gem” that is not being appreciated by Wall Street, according to Baird. The firm added the semiconductor manufacturer to its “fresh pick” list and reiterated its outperform rating on Tuesday. Its $40 price target suggests nearly 80% upside from Monday’s close. Semtech provides high-performance semiconductors, internet of things systems and cloud connectivity services. “We believe Semtech is very well positioned with the upcoming ramp of new AI platforms as one of two players in the space qualified for high-density copper interconnect,” analyst Tristan Gerra wrote in a note to clients. SMTC 1Y mountain Semtech’s one-year performance In addition, a strong ramp of linear-drive pluggable optics, or LPOs, is anticipated next year, and Semtech is expected to be a leader in the space, he said. There will also be a new wave of optical investments in the second half of 2025. Semtech is “firmly entrenched as the leader” in that space due to its time to market, product performance and depth of customer relationships, Gerra noted. “We see a significant discrepancy between what we hear about Semtech’s R & D capabilities, market positioning, opportunity for growth and design wins, versus the Street’s perception of the stock,” he said. “Semtech is a classic turnaround story.” Shares of Semtech were up nearly 7% during midday trading but have fallen 25% over the past 12 months. The stock lost 9.6% last year.
