Microchip, Analog Devices target raised ahead of semiconductor earnings

Investing.com --Wolfe Research raised estimates on select semiconductor names ahead of the fourth-quarter earnings season, arguing that while demand visibility remains mixed across end markets, downside risks appear limited and company-specific drivers are becoming more important.

Wolfe said commentary from analog chipmakers is likely to be mixed but stable, with no broad-based deterioration expected.



The firm expects Microchip Technology to sound the most bullish, following two positive pre-announcements this quarter, noting that Microchip’s recovery has lagged peers and is now gaining momentum.

Wolfe raised its price target on Microchip to $90 from $76 citing stronger-than-expected December-quarter results and management’s commitment to well-above-seasonal growth in the March quarter.

Wolfe also lifted its price target on Analog Devices to $330 by $30, pointing to company-specific drivers and multiple expansion across the analog group.

Wolfe said firms such as Texas Instruments and NXP Semiconductors, which exited the downturn earlier, are likely to wait for firmer demand signals before calling a sustained recovery.

Wolfe said Monolithic Power Systems in analog remains its preferred name due to high exposure to artificial intelligence, while Texas Instruments remains attractive longer term as its multi-year capital expenditure cycle winds down and free cash flow improves.

Wolfe has a positive long-term view on Advanced Micro Devices, raising forecasts on expectations that AI will drive earnings power beyond $10 per share starting in the second half of 2026.

Though near-term catalysts are limited and there are concern PC demand if memory prices rise. Wolfe expects Intel to post acceptable near-term results on server demand, but sees continued market share losses to AMD.

Wolfe sees near-term upside driven by strong iPhone sales, but trimmed estimates for Qualcomm, citing higher operating expenses following the Alphawave acquisition and longer-term share losses at Samsung.

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