Demand for Xilinx, Inc. (NASDAQ: XLNX)'s field programmable gate arrays, or FGPAs, is perking up, prompting Baird to upgrade the stock.
The 5G-related orders for FPGA, a sector in which Xilinx has a 65-percent market share, have seen a "very recent and significant acceleration," Gerra said in a Tuesday note. (See the analyst's track record here.)
This suggests an initial 5G-related ramp in the first-half of calendar 2019, as well as recently finalized design wins, the analyst said.
Baird raised its calendar 2019 revenue estimate for Xilinx .
"The combination of a new infrastructure investment cycle and higher semiconductor content should result in continued revenue momentum for Xilinx in 2019," Gerra said.
Citing recent industry meetings in mainland China, Gerra said he projects an initial and substantial 5G bas estation ramp in China, likely in the second half of 2019. That will be followed by a 5G-related small cells ramp in the first half of 2020, he said.
Data center represents a "longer-term significant growth avenue" for Xilinx, Gerra said.
Even as Baird remains bullish on semiconductor trends for the second half of 2019, Gerra said he prefers defensive, high-quality names.
Xilinx shares are unlikely to be impacted by any potential cyclical slowdown in overall semis, the analyst said.
The Price Action
Xilinx shares were up 1.65 percent at $76.48 at the time of publication Friday.
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Photo courtesy of Xilinx.
Latest Ratings for XLNX
|Aug 2018||Deutsche Bank||Maintains||Hold||Hold|
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