TD Cowen Backs Silvaco’s (SVCO) Growth Outlook, Trims Target to $10

Silvaco Group Inc. (NASDAQ:SVCO) is one of the 10 best debt-free IT penny stocks to buy. Recent developments suggest that Silvaco Group Inc. (NASDAQ:SVCO) is taking measured steps to position itself for long-term growth, even as near-term revenue performance shows some softness.

TD Cowen analyst Krish Sankar recently reaffirmed a Buy rating on the stock, though the price target was revised down to $10 from $12 following a revenue miss in Q1 FY25, attributed largely to order delays. Despite this, Sankar sees reason for optimism. Strategic acquisitions, specifically Cadence’s PPC group and Tech-X, are expected to broaden Silvaco’s addressable market by roughly $600 million. Additionally, with nine new customers added during the quarter and expected strength in the second half of the year, management guidance for 12% revenue growth in CY 2025 signals a healthy outlook.

TD Cowen Backs Silvaco’s (SVCO) Growth Outlook, Trims Target to $10

A technician in a pristine lab, focused on designing a new semiconductor chip.

The analyst also highlights that while the acquisitions have increased operating expenses and introduced some complexity in performance comparisons, expectations for improved gross margins and stronger order bookings in the second half help balance the near-term challenges.

At the same time, Silvaco continues to strengthen its position in advanced semiconductor technologies. The company, on June 24, announced an R&D partnership with Fraunhofer ISIT aimed at accelerating the development of next-generation Gallium Nitride (GaN) devices. Through this collaboration, Fraunhofer will use Silvaco’s Design Technology Co-Optimization (DTCO) tools, including Victory TCAD and SmartSpice, to develop high-performance power and sensor devices on 8-inch wafers.

Taken together, Silvaco’s strategic investments and growth initiatives should enhance long-term value creation, provided the company executes well in the coming quarters.

Silvaco Group Inc. (NASDAQ:SVCO) provides software and services for semiconductor design, development, and manufacturing. The company’s solutions address key needs in TCAD (technology computer-aided design), EDA (electronic design automation), and semiconductor IP, serving various industries.

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