Truist Securities Bullish As MACOM Technology Taps AI, Satellites For Next Wave Of Growth

Truist Securities analyst William Stein initiated coverage on MACOM Technology Solutions Holdings (NASDAQ:MTSI) with a Buy rating and a price target of $125 on Friday.

MACOM Technology is one of the largest suppliers of radio frequency (RF) and similar components. Stein noted that this mature, cyclical, innovative industry is growing at 5% annually.

Also Read: Rising Tide Of AI Is So Strong That Semiconductor Optical Industry Projects $30 Billion Total Addressable Market By 2029

MACOM Technology serves the defense, industrial, data center (AI) and telco end markets (with no consumer exposure). Recently, acquisitions have boosted MACOM Technology’s financial metrics, including revenue growth (above industry), EPS, and ROIC (above WACC). Stein expects this dynamic will continue in the future.

The most prominent is an AI-linked theme: optical components used in data center communications (growing 27% in the medium term). A more overlooked growth driver is components for low-earth orbit (LEO) commercial satellites (growing 68% in the medium term). A third driver is MACOM Technology’s extending its GaN-on-SiC semiconductor technology from the telco end market into the industrial, defense, and data center end markets (growing 18% in the medium term).

Stein expects these drivers to lift MACOM Technology’s medium-term growth by about 12%.

A significant part of MACOM Technology’s heritage business, including industrial and parts of telco, is cyclically depressed, down about 40% from its peak level. Stein expects these will recover over the next few years, which should boost MACOM Technology’s medium-term growth by about 3%.

Tariffs create more than typical volatility around unit demand, costs, and pricing. MACOM Technology will be affected, but Stein noted the effects will be somewhat more moderate than average, considering its geographic split of revenue and manufacturing.

If not for tariffs, Stein would have established a more optimistic model, including over $5 of EPS in calendar 2026; however, tariffs brought him to a more conservative result. Stein’s base case expectation is for MACOM Technology to deliver calendar 2026 revenue of $1.06 billion and EPS of $4.46. He projected calendar 2025 revenue of $960 million and EPS of $3.66.

The company historically trades at a five times premium to the peer group, which trades at 23 times. This suggests a 28 times P/E.

MTSI Price Action: MTSI stock is up 0.15% at $99.42 at publication on Friday.

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