Wall Street Is Suddenly Bullish on This Under-the-Radar Chip Stock

A little-known $2.6 billion market capitalization company called Cohu (COHU) received a vote of confidence last week, but hardly anyone noticed. Baird initiated coverage of COHU stock with an “Outperform” rating and a $65 price target. The bullish outlook helped shares jump 10% during early trading before ending the day up by 6% on July 9. Cohu isn’t a household name, but it does play a quietly important role in the chip industry, making test and inspection equipment used to check that semiconductors work as intended before they are shipped.

Baird’s optimistic view mainly comes down to artificial intelligence (AI). Analyst Quinn Fredrickson believes Cohu is well-positioned to benefit from growing demand in high-performance computing, memory inspection, and power chip testing. Fredrickson expects the firm’s high-performance computing revenue to more than double this year, going from $40 million in 2025 to as much as $100 million. The analyst also sees a large pipeline of potential deals that customers are still testing before fully committing, which could open up a new growth avenue for Cohu heading into 2027.