Semiconductor stock Macom Tech Solutions is Tuesday's pick for IBD 50 Growth Stocks To Watch. Macom stock is in a buy zone out of a flat base. Shares reached a new high Tuesday.
Macom Tech designs and makes semiconductor products for data centers and telecommunications, industrial and defense industries. Its products include chips, switches and power detectors.
The company's foundry business provides design and process assistance as well as testing and support to customers.
The semiconductor stock ranks No. 1 out of 31 stocks in the Electronics-Semiconductor Manufacturing group, which ranks a weak No. 170 out of the 197 groups tracked by Investors Business Daily.
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Semiconductor Stock Hits New High
Macom Tech Solutions stock climbed more than 2% in light volume Tuesday. The IBD 50 name is in the buy zone up to 151.10 of a flat base with a 143.90 buy point, according to MarketSurge pattern recognition.
It is on pace for its fifth straight day of gains after reclaiming its 50-day moving average last week. It also tested and bounced off its 10-week moving average, offering an add-on entry around 135.20.
Shares reached a record high Tuesday as the stock's relative strength line also hit a high. Shares have climbed around 14% so far in January, adding to the nearly 40% gain in 2024.
The stock soared more than 14% in heavy volume on Nov. 7 after the company reported in-line fiscal fourth-quarter adjusted earnings and sales that came in higher than expected. Management also gave a fiscal first-quarter adjusted profit and revenue outlook that topped views.
Its IBD Accumulation/Distribution Rating of A indicates heavy institutional buying over the last 13 weeks, and its 1.3 Up/Down Volume Ratio shows positive demand over the last 50 days.
Chipmaker's Profit Growth Expected To Continue
Macom Tech reported a 30% rise in its fiscal fourth-quarter profit, marking two straight quarters of increases after four declining periods. Estimates call for continued profit growth, with a 35% lift for the fiscal first quarter, followed by 41% and 33%. Fiscal 2025 profit projections show earnings rising 34%, then up 19% for fiscal 2026. That follows two years of declining profits in 2023 and 2024.
Its fourth-quarter revenue growth ramped up to 33% over the prior two quarters after three straight decreasing periods. Similarly, sales forecasts call for a 37% increase in its fiscal first quarter, and an average 21% boost over the following three quarters.
The semiconductor maker is expected to report its fiscal first-quarter results around Jan. 30.
Macom stock's robust 97 Composite Rating is the highest in its group. Its Earnings Per Share Rating of 95 puts it in second place among the 31 stocks in the group.
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