MACOM Technology Solutions MTSI introduced a 227 Gbps per lane copper cable equalizer device to expand its product family of linear equalizers.
Notably, the device doubles the reach of Direct Attach passive copper cable transmission, providing longer 1.6 Tbit assemblies for high-performance computing and AI high-density cluster applications.
Further, the MAEQ-40904 and MAEQ-40914 products with 50Gbps and 100Gbps per lane equalizer solutions offer high bandwidth and low latency connectivity, which can be achieved using eight-lane octal small form factor pluggable and quad small form factor double density (QSFP-DD-based) cables.
Additionally, the devices' compact size and low power consumption make them suitable for use in dual small form factor pluggable cable connectors.
The company is expected to gain solid traction among Ethernet, InfiniBand, Fibre Channel and proprietary interconnect applications on the back of its latest move.
MACOM Technology Solutions Holdings, Inc. Price and Consensus
MACOM Technology Solutions Holdings, Inc. price-consensus-chart | MACOM Technology Solutions Holdings, Inc. Quote
The latest move of the company positions it well to capitalize on the growth prospects present in the global data center market.
A Future Market Insights report indicates that the global data center market is expected to reach $209.8 billion by 2032, by registering a CAGR of 7.5% between 2022 and 2032.
Per a Statista report, data center market revenues are expected to hit $325.9 billion in 2023 and reach $438.7 billion by 2028, witnessing a CAGR of 6.1% during the forecast period of 2023-2028.
We believe that the growing presence in this promising data center market is expected to aid the company in winning investor optimism in the near term.
MACOM has gained 29.8% in the year-to-date period, outperforming the industry’s growth of 17.7%.
Moreover, the latest launch can be seen as MACOM’s strategy to address its sluggish performance in the data center market. Weak momentum across high-performance analog data center products remains a concern.
In third-quarter fiscal 2023, the company generated revenues of $26.6 million from the data center market (17.9% of total sales), down 23.4% from the year-ago quarter.
Our model estimates fiscal 2023 data center revenues to be $138.1 million, the same as recorded in fiscal 2022.
Expanding Portfolio: Key Catalyst
The latest move is in sync with the company’s growing efforts toward expanding its overall product portfolio.
Apart from the latest launch, MACOM introduced a 226Gbps per lane technology product family for 1.6TB optical modules, featuring MACOM transimpedance amplifiers (TIA), Externally Modulated Laser (EML) driver and photodiode.
The TIAs support KP4 and IEEE concatenated Forward Error Correction, while the EML driver offers ultra-low inductance interfaces for optimal performance. The photodiode features high responsivity and an integrated lens for improved alignment tolerance.
Further, MACOM acquired Wolfspeed's RF business, expanding its portfolio of Gallium Nitride (“GaN”) on Silicon Carbide (“SiC”) products used in high-performance RF and microwave applications.
Additionally, MACOM acquired OMMIC SAS' key manufacturing facilities in France, forming the foundation for its European Semiconductor Center, which will enhance MACOM’s portfolio of higher frequency GaAs and GaN monolithic microwave integrated circuits.
We believe that MACOM’s portfolio strength will continue to help it sustain customer momentum across various end markets. This, in turn, will drive its financial performance in the days ahead.
For fourth-quarter fiscal 2023, MACOM expects revenues between $148 million and $152 million.
Zacks Rank & Other Stocks to Consider
Currently, MACOM carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are Asure Software ASUR, Arista Networks ANET and Carrier Global CARR. While Asure Software sports a Zacks Rank #1 (Strong Buy), Arista Networks and Carrier Global carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Asure Software shares have lost 6.2% in the year-to-date period. ASUR’s long-term earnings growth rate is currently projected at 27%.
Arista Networks shares have gained 54.8% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 18.75%
Carrier Global shares have gained 32.3% in the year-to-date period. CARR’s long-term earnings growth rate is currently projected at 10.12%.
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