Two semiconductor stocks advanced on Tuesday after getting bullish reports from a Wall Street analyst. Arm stock and Monolithic Power Systems stock both scored price-target hikes.
Rosenblatt Securities analyst Hans Mosesmann raised his 12-month price target on Arm stock to 110 from 85. He also upped his price target on Monolithic to 750 from 550. Mosesmann has buy ratings on both fabless semiconductor stocks.
In morning trades on the stock market today, Arm stock notched an all-time high of 74 after jumping 2.4%. It ended the day up 1.6% to 73.41.
Meanwhile, Monolithic stock rose 3.1% to close at 637.04.
The Philadelphia Semiconductor Index, known as SOX, increased 1.8% on Tuesday. The SOX includes the 30 largest semiconductor stocks traded in the U.S.
Semiconductor Stocks: Arm On Leaderboard
Mosesmann sees Arm benefiting from chipmakers using its designs for make chips for artificial intelligence applications.
Factors driving Arm's multiyear road map include the shift to its v9 architecture and AI moving to network edge devices where graphics processing units are suboptimal, he said.
Arm also looks to gain market share in central processing units for PCs and servers, Mosesmann said.
As for Monolithic, he sees the company capitalizing on selling power management chips for AI applications. The company has a "deep and sustained relationship with Nvidia and other AI accelerator chip players in power analog chips" and related products, Mosesmann said.
Plus, Monolithic should benefit from the continued growth of chips for automotive applications, especially in electric vehicles.
Arm stock is on IBD's Leaderboard and IPO Leaders stock lists. Monolithic is on the watchlist for IBD's Long-Term Leaders Portfolio.
IBD Stock Checkup ranks Arm stock as second out of 37 stocks in IBD's fabless semiconductor industry group. Monolithic stock ranks sixth in the group.
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