Tracking-chip maker Impinj is seeing its fortunes rise as more silicon wafers become available to produce its semiconductors. Impinj stock has been a top performer since mid-2022.
Piper Sandler analyst Harsh Kumar on Tuesday reiterated his overweight, or buy, rating on Impinj stock after meeting with company executives. He has a price target of 140 on the stock.
On the stock market today, Impinj stock rose 5% to close at 131.15.
"The company is on a strong path to growth as more supply comes online and use cases for RFID chips continue to expand," Kumar said in a note to clients.
Wafer Supply Has Held Back Impinj
Seattle-based Impinj makes tiny tracking chips that can connect items to the internet cloud for customers in retail, transportation, logistics and other industries. The company uses a wireless technology called Rain RFID, which stands for radio-frequency identification. The Rain flavor of RFID also derives its name from radio-frequency identification.
Its chips are used mostly for inventory management now. But the company is expanding the capabilities of its chips to services such as retail self-checkout, loss prevention and anti-counterfeiting.
Wafer supply has been driver for Impinj over the last several quarters, Kumar said. Demand for its products continues to outpace its ability to produce them.
"A critical choke point has been the availability of wafers," Kumar said. "We remain confident that Impinj should see increased wafer supply both in March as well as the June quarters. We also continue to expect further upside to wafer supply in the second half of the year."
Impinj Stock Is On IBD Tech Leaders List
Taiwan Semiconductor Manufacturing is the company's sole chip supplier, Kumar said.
NXP Semiconductors is the primary competitor to Impinj, but Impinj has a superior cost structure, Kumar said.
On Jan. 18, Impinj stock broke out of a cup base at a buy point of 129.12, according to IBD MarketSmith charts. Since then, it has seesawed in and out of the buy zone, but has found support at its 50-day moving average line.
Impinj stock notched an all-time high of 144.90 on March 6. The company reported fourth-quarter earnings on Feb. 8.
Further, Impinj stock is on the IBD Tech Leaders list.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
