Analyst David Williams of Benchmark Co. maintained a Buy rating on Diodes (DIOD – Research Report), with a price target of $65.00.
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David Williams has given his Buy rating due to a combination of factors including the company’s ability to stabilize its business and macro environment, particularly with strong performance in Asia, offsetting weaker areas in Europe and North America. Diodes has shown resilience with positive trends in end demand and inventory management, leading to expectations for continued revenue growth, especially in their core automotive and industrial sectors which contribute significantly to their revenue. Additionally, the AI server market remains robust, with increased demand from major North American cloud providers, enhancing the company’s growth potential.
The company is also making strategic moves by transitioning production to in-house facilities, which is expected to improve gross margins over time. While there are some short-term challenges, like lower revenue and slightly higher operating expenses, the long-term outlook remains positive with expectations for operational expenditure to decline as a percentage of revenue. These strategic initiatives and market positioning are key reasons for maintaining the Buy rating, even as the price target is adjusted to reflect current market conditions.
Williams covers the Technology sector, focusing on stocks such as D-Wave Quantum, Belden, and Maxlinear. According to TipRanks, Williams has an average return of 25.6% and a 51.67% success rate on recommended stocks.