Thursday, April 9, 2020

Inphi's Reaping The Rewards Of First-Mover Advantage In Data Center

With semiconductor stocks selling off on worries about weakness in autos, consumer products (including smartphones), and industrial markets, data center is one of the few areas of strength in the space, and Inphi’s (IPHI) strong growth position in that market is even more attractive now. Strong results and ongoing growth in high-end data center deployments continue to drive these shares, with the stock up almost 20% so far this year and more than 90% over the past year.

As I’ve said before in reference to Inphi’s valuation, you’re either on board with the growth/momentum angle and relatively insensitive to valuation, or you’re on the sidelines waiting for a sell-off. The stock did pull back briefly below $60 at what looks like will be the “peak panic” moment for this Covid-19 outbreak, but has since shot up close to 60%. I can’t call today’s price any sort of bargain by typical valuation approaches, but Inphi continues to offer very atypical growth on the back of drivers like ColorZ, PAM4, and 400G ZR.

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Inphi's Reaping The Rewards Of First-Mover Advantage In Data Center

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