What Happened?
Shares of semiconductor company Semtech (NASDAQ: SMTC) fell 6.8% in the morning session after the company reported underwhelming first quarter 2025 results: revenue was just in line this quarter, and revenue guidance for next quarter missed.
On the other hand, Semtech reported a big improvement in inventory levels. Its adjusted operating income outperformed Wall Street's estimates. Still, this print was a mixed yet weaker quarter.
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What The Market Is Telling Us
Semtech’s shares are extremely volatile and have had 56 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 23.5% on the news that the company reported impressive third-quarter results that blew past analysts' revenue and EBITDA expectations. Its full-year guidance for the same metrics outperformed Wall Street's estimates. While the top line strength was broad-based, management called out the data center, which benefited from AI-driven product demand. Zooming out, we think this quarter featured some important positives.
Semtech is down 41.1% since the beginning of the year, and at $36.58 per share, it is trading 52.6% below its 52-week high of $77.15 from January 2025. Investors who bought $1,000 worth of Semtech’s shares 5 years ago would now be looking at an investment worth $711.12.
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