Semtech (SMTC, Financial) shares climbed 8.92% to $75.08 as of 11:59 AM ET on Friday after UBS initiated coverage with a Buy rating, citing the company's expanding role in AI data centers and a critical product win in Nvidia's ( NVDA) Blackwell platform. Analyst Timothy Arcuri highlighted Semtech's CopperEdge CTLE, a key networking component in Nvidia's AI infrastructure.
The product offers lower cost and power consumption compared to digital alternatives, positioning Semtech as a major beneficiary of the AI boom. UBS set an $85 price target, noting the stock has surged nearly 300% over the past year. "Nvidia is pushing hard to scale AI networking, and Semtech's CopperEdge solution is at the center of that effort," Arcuri said.
Semtech CEO Hong Hou reinforced the company's importance in high-bandwidth, low-latency network connectivity, a crucial piece of AI data centers. As Nvidia scales its AI capabilities alongside major chipmakers like Intel (INTC, Financial) and AMD (AMD, Financial), Semtech's networking technology is expected to see further adoption.
