Chip company Silicon Labs (NASDAQ:SLAB) was already doing pretty well with its Internet of Things (or IoT) business back in the summer of 2016, but I underestimated the company's ability to continue to leverage that driver. As IoT is becoming an increasingly real driver, it is having a solidly positive influence on Silicon Labs' performance, and the shares are now about 40% higher than when I last wrote on the company.
Silicon Labs isn't going to have the IoT opportunity all to itself; Qualcomm (NASDAQ:QCOM) (through NXP Semiconductors (NASDAQ:NXPI)), Microchip (NASDAQ:MCHP), Texas Instruments (NYSE:TXN), and STMicroelectronics (NYSE:STM) among others are going to be competing fiercely in this growing market. Silicon Labs' strong positioning across the range of connectivity options and in mesh networking are important drivers, but other rivals have their own areas of strength in MCUs, security, sensing, and so on. What's more, the valuation is now considerably more demanding, and with it come much higher expectations for the lead IoT and Infrastructure businesses.
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Strong Execution On IoT Is Taking Silicon Labs To A New Level