Investing.com -- Wells Fargo initiated coverage on a range of semiconductor stocks on Friday, highlighting key opportunities and challenges across the sector.
ON Semiconductor (NASDAQ:ON), Arm Holdings (NASDAQ:ARM), Allegro (WA:ALEP) MicroSystems (ALGM), and Cadence Design Systems (NASDAQ:CDNS) have been rated Overweight, reflecting optimism about their growth potential.
Wells Fargo (NYSE:WFC) is bullish on ON Semiconductor’s positioning in the silicon carbide (SiC) market, expecting revenue acceleration tied to battery electric vehicle (BEV) adoption. The bank assigned the stock an $85 per share price target.
Arm’s Armv9 architecture and CSS solutions are seen as foundational for growth, particularly in PC and cloud infrastructure markets, with analysts noting the potential for higher royalty rates and market share gains. Wells Fargo gave the stock a $155 price target.
Allegro, which was assigned a $23 target, is seen as well-positioned to benefit from eMobility growth, driven by increased magnetic sensor content in both internal combustion engine (ICE) and BEV platforms.
Wells Fargo anticipates that a hardware cycle ramp in 2025, including demand from China, will boost Cadence’s revenue growth, complemented by opportunities in AI monetization. The bank gave the stock a $350 price target.
Other stocks initiated at Equal Weight include Synopsys (NASDAQ:SNPS; PT $570), Monolithic Power Systems (NASDAQ:MPWR; PT $610), Analog Devices (NASDAQ:ADI; PT $220), MaxLinear (MXL; PT $14), and Texas Instruments (NASDAQ:TXN; PT $215).
Analysts cite factors such as range-bound trading, limited visibility into demand recovery, and structural risks.
Notably, NXP Semiconductors (NASDAQ:NXPI; OW; PT $250) is highlighted for its diverse manufacturing strategy and market share gains, while the firm maintains cautious optimism about the semiconductor cycle, with demand “bouncing along the bottom” in the near term.
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