This semiconductor stock is in the dumps. BMO says it can bounce back
Macom Technology Solutions is poised for a comeback amid the artificial intelligence boom, according to BMO Capital Markets. The bank upgraded the semiconductor stock to outperform from market perform. It reiterated its price target of $335 per share, implying 27% upside from Thursday’s close. “Valuations have become attractive as forward multiples retraced from high-50s in June to now 29x,” analyst Harsh Kumar said Thursday in a note. “Fundamentals have remained solid throughout driven by datacenter and industrial/defense … defense remains resilient and space becomes a material contributor to growth next year.” Macom develops high-performance analog and radio frequency semiconductor products used in data centers and throughout the telecommunications, industrial and defense industries. Shares of Macom have fallen about 30% over the past three months amid macroeconomic concerns and pullbacks in semiconductors. It now trades more than 30% below its peak of $418.90 hit in late May. MTSI 3M mountain Shares are down roughly 33% over the past three months. However, the company’s stock could get a boost as its data center business booms due to hyperscalers, cloud service providers and AI labs putting funds toward AI compute and networking infrastructure, per analyst Kumar. Revenue for Macom’s data center vertical is expected to grow 70% in fiscal 2026, accelerating from a 47% increase in the previous fiscal year. Additionally, a recovery in the broad-based industrial market and expansions in space programs should also benefit Macom, per the bank. BMO Capital Markets’ call falls in line with consensus on Wall Street. Of the 18 analysts covering MACOM, 13 have a buy or strong buy rating on the stock, while five have a hold on it, LSEG data shows.
