Semtech (NASDAQ:SMTC) surged around 18% intra-day today after reporting better-than-expected fourth-quarter results, fueled by rising demand for AI and machine learning applications that drove data center sales and improved margins.
For the quarter, the semiconductor and cloud services provider posted adjusted earnings per share of $0.40, beating analyst expectations of $0.33. Revenue reached $251 million, slightly exceeding the forecasted $250.18 million.
Semtech also saw significant margin expansion, with adjusted gross margin rising to 53.2%, up from 48.9% a year ago, reflecting operational efficiencies and a favorable product mix.
Looking ahead to the first quarter, Semtech provided a mixed outlook. The company expects adjusted EPS between $0.34 and $0.40 and revenue in the range of $245 million to $255 million. While these figures align closely with market expectations, the broader semiconductor sector remains volatile as AI-driven growth fuels demand for specialized chips.