Here’s Why Semtech Corp. (SMTC) Crashed on Friday

We recently compiled a list of the 10 Companies Echo Friday’s Market Pessimism. In this article, we are going to take a look at where Semtech Corp. (NASDAQ:SMTC) stands against the other stocks.

Ten companies were hit hard on Friday as investors digested disappointing earnings performance and dismal outlook guidance for 2025.

The shares’ performance traded in line with Wall Street’s major indices, with the Dow Jones losing 0.99 percent, the S&P 500 falling 0.95 percent, and the tech-heavy Nasdaq diving 1.36 percent.

To come up with Friday’s worst performers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A technician looking at a circuit board of analog semiconductor products.

Semtech Corp. (NASDAQ:SMTC)

Semiconductor manufacturer Semtech Corp. dropped for a second day on Friday, losing another 9.9 percent to finish at $54.51 apiece after an analyst downgraded the company’s price target, citing slower take-up in the chipmaker’s products.

On Friday, Baird analysts lowered their price target for SMTC to $60 from $80 previously, while maintaining an “outperform” rating on the stock.

The analysts cited slower-than-expected take-up in SMTC’s active copper cables (ACC), which offer extended reach to allow for high-volume switch-to-server connections.

The brokerage firm also noted that it observed muted activity in overall ACC take-up.

“ACC benchmarking activity has been muted in the past few months outside of Meta. ACCs and LPOs remain a medium-term opportunity for Semtech and are the basis for our Outperform rating; however, investors should brace for near-term turbulence,” Baird said in its note.

Overall SMTC ranks 7th on our list of Friday’s worst performers. While we acknowledge the potential of SMTC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SMTC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.