Baird Reiterates Buy on Semtech (SMTC), Highlights AI Growth and Partnerships

Semtech Corp. (NASDAQ:SMTC) is one of the worst-performing data center stocks in 2025. Although the company’s stock is up around 1.8% year-to-date, it has underperformed the broader market and its peers in the data center industry, which have seen an upbeat performance.

Baird Reiterates Buy on Semtech (SMTC), Highlights AI Growth and Partnerships

That said, on September 28, Robert W. Baird analyst Tristan Gerra reaffirmed a Buy rating on the stock with a $70 price target. His positive view is based on several areas of growth the company is pursuing.

Semtech’s LoRa segment is expected to grow more than 20% in 2026, helped by new uses in security and retail. These applications could open up new markets and expand adoption. According to the analyst, the company is also making progress in AI infrastructure, which has become another key growth driver.

The analyst also believes that among the company’s opportunities, an important one lies in Semtech’s partnerships with large U.S. cloud providers on linear pluggable optics (LPOs). These projects offer higher pricing potential and could boost margins. Additionally, a recent design win with AEC and the chance to lead in ACC opportunities strengthen its long-term outlook.

Semtech Corp. (NASDAQ:SMTC) designs analog and mixed-signal semiconductors used in data centers, industrial automation, and IoT applications.

While we acknowledge the potential of SMTC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SMTC and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.