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Why Xilinx, Inc. Stock Gained 10.4% in July

Keith Noonan, The Motley Fool

What happened

Xilinx, Inc. (NASDAQ: XLNX) shares gained 10.4% in July, according to data provided S&P Global Market Intelligence. The semiconductor company's stock trended upward in the lead-up to its first-quarter earnings release on July 25 and then posted substantial gains following the results. 

XLNX Chart

XLNX data by YCharts.

Xilinx's most recent earnings report delivered record sales, rising 14% year over year and 7% sequentially, after adjustment for the company's new accounting standard, to hit $684 million. The company also delivered record net income in the quarter, with earnings climbing 25% year over year to reach $0.74 per share.

A video camera lens.

Image source: Getty Images.

So what

In addition to strong sales and earnings performance in the first quarter, Xilinx also raised its full-year guidance. Here's the company's Chief Executive Officer Victor Peng giving a market outlook and touching on the performance in the data center segment and recent acquisitions:

Given the strength we see across our end markets, we are raising our revenue guidance for the full year to approximately 15% growth, compared to the prior year. We made excellent progress executing to our Data Center strategy with significant design wins with hyperscalers, training an additional 500 AWS F1 developers and completing multiple investments in our ecosystem. We also acquired DeePhi Tech, an Artificial Intelligence (AI) company with innovative Deep Neural Network (DNN) technology for the cloud and the edge.

The company raised its revenue target for the year by roughly $100 million, and it now expects sales under its new accounting system to come in between $2.8 billion and $2.9 billion.

Now what

Xilinx's leadership position in field-programmable gate arrays has it poised to capitalize on high-growth markets like data centers, machine vision, and artificial intelligence. Investors looking to benefit from momentum in these fields should have Xilinx on their watchlists. Shares trade at roughly 24.5 times this year's expected earnings and have a 1.9% dividend yield. 

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Keith Noonan 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.