According to reports, ahead of the earnings season, Barclays has made significant rating adjustments for several semiconductor-related companies. The bank has downgraded Lumentum (LITE.US), Astera Labs (ALAB.US), and Marvell Technology (MRVL.US) from "Overweight" to "Hold," citing a decrease in their attractiveness compared to other companies that have already entered the AI sector. Barclays particularly favors the investment value of KLA-Tencor (KLAC.US), Coherent (COHR.US), and MACOM Technology Solutions (MTSI.US).
Specifically, before this downgrade, Lumentum's stock price had increased by 60% over the past three months, significantly outpacing the S&P 500's 5% growth during the same period. Analyst Tom O'Malley emphasized in a client report, "We do not continue to view Lumentum favorably at this time, as its risk-reward profile no longer exhibits a distinct advantage over its peers. Although there are potential upside catalysts from EML capacity expansion and clients in optical transceivers, the room for growth is relatively limited given the elevated valuation thresholds."
The downgrade for Astera Labs is attributed to insufficient market penetration of its UALink products—apart from Amazon's Trainium 3 project, the product has yet to establish significant advantages within broader Ethernet, ESUN, and SUE-T product systems. The industry is moving toward Ethernet, ESUN, and SUE-T solutions, putting UALink at risk of being marginalized. Meanwhile, the downgrade for Marvell Technology is due to weaker-than-expected performance in its ASIC business and additional market risks facing its data center operations.
It is noteworthy that Barclays' adjustments do not indicate a broad bearish outlook on the semiconductor sector. The bank simultaneously upgraded the stock rating of semiconductor equipment leader KLA-Tencor (KLAC.US) to "Overweight," stating, "We remain optimistic about the long-term prospects for enhanced process control strength and KLA-Tencor's business positioning in leading industry sectors. With relatively low revenue growth thresholds in markets outside of China, the company is expected to enter a strong growth cycle in the future."