Camtek valuation upside may be capped near term, says Needham

Needham analyst Charles Shi says Camtek (CAMT) reported a “beat-and-raise quarter” and sees continued strength in high performance computing at least through the first half of 2025, which will still account for 50% of overall revenue. Despite the overall strength, the market is likely reading the 50% high performance computing and higher outsourced semiconductor assembly and test mix as an implied guidance on “relatively lukewarm” high bandwidth memory spending, which could cap upside to the multiple in the near term, the analyst tells investors in a research note. Nonetheless, Needham believes Camtek’ “strong and steady earnings growth will eventually become too difficult to ignore.” It maintains a Buy rating on the shares with a $110 price target