BMO Capital Markets has upgraded Macom Technology Solutions from market perform to outperform, maintaining a price target of $335 per share, which indicates a 27% upside from its recent closing price. Analyst Harsh Kumar noted that the stock's valuation has become attractive, with forward multiples decreasing from the high-50s in June to 29x currently.
Despite a 30% decline in shares over the past three months due to macroeconomic concerns and semiconductor market pullbacks, Macom's fundamentals remain strong, particularly in its data center and defense sectors. The company is expected to see a 70% revenue growth in its data center vertical by fiscal 2026, driven by investments from hyperscalers and AI labs.
Additionally, a recovery in the industrial market and growth in space programs are anticipated to further benefit Macom. The consensus among analysts is positive, with 13 out of 18 recommending a buy or strong buy on the stock