| | | Would have to ask my BoA contact over weekend for full report but this kind of gets to the gist of it, fwiw.
Silicon Motion upgraded to Buy by BofA due in part to Nvidia partnership
Silicon Motion (NASDAQ:SIMO) was upgraded to Buy from Neutral by Bank of America due in part to its partnerships with large-scale NAND chipmakers and big U.S. tech companies, such as Nvidia (NASDAQ:NVDA).
Silicon Motion shares jumped 4.5% during early market action on Wednesday.
The Hong King-based Silicon Motion designs NAND flash controllers for solid-state storage devices. Its chips are manufactured by Taiwan Semiconductor Manufacturing (TSM).
Silicon Motion also has "resilient top-line growth with high GM (low impact of US tariff given strong bargaining power and well-managed foundry sourcing from TSMC)," said BofA analysts, led by Simon Woo, in a Wednesday investor note.
"Similar to memory chipmakers, SIMO could also benefit from strongly growing sovereign AI investments by selling eSSD controllers/boot-drivers (known as MonTitan series)," Woo added.
BofA also increased its price target to $90 from $55.
"Our new PO of US$90 is derived from 3.8x 2025-26E P/B (was 2.4x)," Woo said. "This is close to the upper band of the historical range (2.0-4.0x in 2015-24) due to new growth opportunities with AI data centers."
Seeking Alpha analyst Emmanuel Onwusah recently recommended a cautious Buy on Silicon Motion.
"I see significant growth opportunities in enterprise storage and data center demand, especially with new products like MonTitan and automotive expansion," he said.
He also highlighted strong margins and its attractive entry point.
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