Inphi Validating Its Growth Stock Credentials, With PAM About To Ramp

Although I liked Inphi (IPHI) as a higher-valuation/higher-risk pick back in September, I didn’t quite expect the 35% move the shares have logged since then. While Inphi has done quite a bit better than the SOX, and would-be competitor MACOM (MTSI), MaxLinear (MXL) has more or less kept pace as investors get more bullish about the upcoming ramp of PAM chips in high-end data centers.

As things sit now, I still love the opportunity Inphi has in data centers, not to mention an arguably under-appreciated opportunity in 5G backhaul. The valuation more fully reflects that, though, and so while I do think Inphi is capable of additional beat-and-raise quarters, I can’t really say this is a situation where the Street is significantly underpricing the near-term opportunity. That said, looking a few years out at what this company could do in terms of revenue, margins, EBITDA and so on, there could still be further upside for shareholders.

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Inphi Validating Its Growth Stock Credentials, With PAM About To Ramp