Investors Buy Large Volume of Call Options on Semtech (NASDAQ:SMTC)

Semtech Corporation (NASDAQ:SMTC) was the target of unusually large options trading on Wednesday. Stock investors purchased 8,300 call options on the company. This represents an increase of 84% compared to the typical daily volume of 4,502 call options.

Key Semtech News

Here are the key news stories impacting Semtech this week:

• Positive Sentiment: Semtech reported fiscal Q2 revenue of $341.9 million, up 33% year over year, while non-GAAP earnings of $0.71 per share exceeded the approximately $0.61 consensus estimate. Growth was driven by data-center demand, LoRa IoT products and improved margins. Semtech’s Q2 Earnings Surpass Estimates, Revenues Increase Year over Year
• Positive Sentiment: The company issued an especially strong fiscal Q3 outlook: revenue of $405 million to $415 million and adjusted EPS of $1.02 to $1.08, both well above analyst expectations. The guidance suggests continued sequential acceleration. Semtech Announces Second Quarter Fiscal 2027 Results
• Positive Sentiment: Management highlighted a major data-center ramp, including 1.6-terabit networking opportunities, a record backlog and data-center sales growth of about 91%. Capacity expansion is intended to address demand tied to artificial-intelligence infrastructure. Semtech Dumps Cellular Business to Double Down on Data Centers
• Positive Sentiment: Semtech plans to divest its cellular business and focus more heavily on data centers and connected IoT. Investors may view the transaction as a portfolio upgrade that could improve the company’s structural growth and margins. SMTC Q2 Earnings Call Spotlights 1.6T Data Center Growth
• Positive Sentiment: Needham and Susquehanna reiterated Buy ratings, with price targets of $200 and $200, respectively, citing data-center growth, guidance and potential profitability upside. Semtech Gains as Needham Praises Results and Guidance
• Neutral Sentiment: Call-option volume was unusually high, with roughly 8,300 calls traded versus an average of about 4,500. This signals heightened bullish speculation but does not guarantee sustained buying.
• Negative Sentiment: Quiver Quantitative reported that Semtech insiders recorded only sales—not purchases—in the past six months. Insider selling may temper sentiment, although it is less influential than the earnings and outlook surprise.

Analysts Set New Price Targets

SMTC has been the topic of several analyst reports. Oppenheimer set a $200.00 target price on shares of Semtech in a research report on Wednesday, May 27th. Benchmark restated a “buy” rating on shares of Semtech in a research report on Thursday, August 20th. Robert W. Baird raised their price objective on shares of Semtech from $110.00 to $225.00 and gave the stock an “outperform” rating in a research note on Wednesday, May 27th. TD Cowen lifted their price objective on shares of Semtech from $210.00 to $215.00 and gave the stock a “buy” rating in a research report on Monday, June 22nd. Finally, Craig Hallum boosted their target price on shares of Semtech from $105.00 to $205.00 and gave the company a “buy” rating in a research note on Wednesday, May 27th. Fourteen investment analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $201.44.

Insiders Place Their Bets

In related news, CEO Hong Q. Hou sold 2,000 shares of the stock in a transaction on Friday, July 10th. The stock was sold at an average price of $133.00, for a total value of $266,000.00. Following the completion of the transaction, the chief executive officer owned 64,799 shares in the company, valued at $8,618,267. This trade represents a 2.99% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider John Michael Wilson sold 5,500 shares of Semtech stock in a transaction dated Monday, June 22nd. The stock was sold at an average price of $170.00, for a total value of $935,000.00. Following the completion of the transaction, the insider directly owned 80,876 shares in the company, valued at $13,748,920. This represents a 6.37% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 21,734 shares of company stock worth $3,133,986. Corporate insiders own 0.44% of the company’s stock.

Institutional Trading of Semtech

Institutional investors have recently bought and sold shares of the company. ABS Investment Management LLC acquired a new position in Semtech in the 2nd quarter worth about $178,035,000. FNY Investment Advisers LLC lifted its holdings in shares of Semtech by 900.0% during the 2nd quarter. FNY Investment Advisers LLC now owns 200 shares of the semiconductor company’s stock valued at $32,000 after buying an additional 180 shares during the last quarter. Mitsubishi UFJ Asset Management Co. Ltd. acquired a new stake in shares of Semtech during the 2nd quarter valued at about $32,000. Allworth Financial LP bought a new stake in shares of Semtech in the 2nd quarter valued at approximately $55,000. Finally, Allied Private Wealth LLC bought a new stake in shares of Semtech in the 2nd quarter valued at approximately $65,000.

Semtech Stock Up 8.3%

SMTC traded up $10.61 on Wednesday, reaching $138.13. 6,029,823 shares of the company traded hands, compared to its average volume of 2,723,193. The stock’s 50 day moving average price is $136.12 and its 200-day moving average price is $118.21. Semtech has a 52-week low of $55.18 and a 52-week high of $177.35. The company has a market cap of $12.87 billion, a price-to-earnings ratio of -352.44 and a beta of 2.35. The company has a debt-to-equity ratio of 0.86, a current ratio of 2.37 and a quick ratio of 1.62.

Semtech (NASDAQ:SMTC) last released its earnings results on Tuesday, August 25th. The semiconductor company reported $0.71 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.61 by $0.10. The company had revenue of $341.90 million during the quarter, compared to the consensus estimate of $328.67 million. Semtech had a negative net margin of 3.05% and a positive return on equity of 18.31%. The company’s revenue was up 32.7% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.41 EPS. Semtech has set its Q3 2027 guidance at 1.020-1.080 EPS. On average, sell-side analysts expect that Semtech will post 1.81 EPS for the current fiscal year.

About Semtech

Semtech Corporation is a leading supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms. The company’s products address a broad range of applications in the Internet of Things (IoT), data center and telecom, industrial, home automation, automotive, and aerospace markets. Semtech’s portfolio includes power management, signal integrity, protection devices, wireless and sensing technologies that enable smarter, more connected systems worldwide.

A core offering from Semtech is its LoRa® technology, a low-power, long-range wireless communication platform that has become a de facto standard for global IoT deployments.