Why Semtech Stock Raced 15% Higher Today

Key Points

• The chipmaker delivered a solid beat-and-raise second quarter.

• This was bolstered by heavy demand from an important customer segment.

• 10 stocks we like better than Semtech ›

Shattering a quarterly record for net sales, specialty chipmaker Semtech (NASDAQ: SMTC) made a splash on the stock market Tuesday with its latest earnings report. Investors flocked to the company that day, leaving it with a more than 15% gain on its share price at closing. By comparison, the S&P 500 index only eked out an increase, with a 0.4% rise that trading session.

Securing a new record

That all-time high was $257.6 million, which bested Semtech's take in the year-ago quarter by a robust 20%. The company's second quarter of 2026 also saw a dramatic improvement in non-GAAP (adjusted) net income; this line item ballooned to $36.7 million ($0.41 per share) from the $8.1 million it netted in the same period of fiscal 2025.

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Image source: Getty Images.

Analyst expectations were high for Semtech, and the company managed to top them. On average, pundits following the stock were modeling barely over $256 million on the top line, and a per-share, adjusted net profit figure of $0.40.

In the conference call dissecting these results, Semtech didn't hesitate to point out that this marked its sixth quarter in a row where it's notched year-over-year growth in net sales. Much of the second-quarter growth was powered by the data center segment, which also set a record. It reaped over $52 million for the period, a 92% improvement over the same quarter of last year.

Sequential top-line improvement expected

In its earnings release, Semtech proffered guidance for its current (third) quarter. The company predicts it will book $261 million to $271 million in net sales, filtering down into a per-share, adjusted net profit of $0.41 to $0.47 per share. That's roughly in line with the consensus analyst estimates of $265 million and $0.44, respectively.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.