Evercore Remains Bullish on Allegro MicroSystems (ALGM), Cites Robust Automotive and Data Center Cycles

Allegro MicroSystems, Inc. (NASDAQ:ALGM) is one of the overlooked tech stocks to invest in.

On October 31, 2025, Evercore ISI increased its price target on Allegro MicroSystems, Inc. (NASDAQ:ALGM) from $37 to $49, while maintaining an “Outperform” rating. The bullish stance of the firm reflects robust automotive and data center cycles, with Evercore highlighting the stock as a top SMID analog pick. The analyst optimism stemmed from a robust growth outlook, driven by a restocking cycle and expanding data center opportunities.

vichie81/Shutterstock.com

On the previous day, Allegro MicroSystems, Inc. (NASDAQ:ALGM) announced its second-quarter results. The quarter marked a 14% YoY growth in sales, taking them to $214 million, thanks to 21% and 23% growth in e-Mobility and Industrial & Other segments. Furthermore, non-GAAP EPS came in at $0.13, beating expectations. The robust performance in the quarter was driven by record automotive sensor demand, data center fan driver IC sales, and rapid adoption of high-speed current sensors.

The short-term growth momentum remains on track with design wins in ADAS, xEV powertrains, and data center power supplies. Meanwhile, the long-term growth outlook remains robust, thanks to the new high-voltage gate drivers for silicon carbide. As a result, Allegro MicroSystems, Inc. (NASDAQ:ALGM) expects Q3 sales to lie somewhere between $215 million and $225 million, gross margins to be within the 49%-51% range, and non-GAAP EPS to come out between $0.12 and $0.16.

Allegro MicroSystems, Inc. (NASDAQ:ALGM) advances automotive, clean energy, and industrial automation by delivering efficient, high-performance, and sustainable technology solutions.

While we acknowledge the potential of ALGM 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 ALGM and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 Best Small-Cap Biotech Stocks to Buy According to Analysts and 11 Best AI Infrastructure Stocks to Buy Right Now.

Disclosure: None.