Mizuho, TD Cowen Raise Allegro Price Targets as Market Looks for AI Wave Beneficiaries Beyond Tech Giants

BlockBeats News, June 30th, on Monday, US stock sensor and power semiconductor solution provider Allegro MicroSystems (ALGM) rose by 14.7%, closing at $66.37 and reaching a historical high of $67.41 during the day. Mizuho Securities analyst Vijay Rakesh maintained the stock's "Outperform" rating and raised the target price from $54 to $67. The reason is that the company is benefiting from the surge in AI server demand for current sensors, fan drivers, and power semiconductors.

TD Cowen also identified Allegro as one of the "top picks" in mid-cap stocks, with a target price of $70. The firm believes that the electrification of vehicles, autonomous driving, and AI data centers are all long-term growth drivers for the company, with the data center business currently accounting for approximately 14% of Allegro's revenue.

Such rating adjustments indicate that Wall Street is looking for AI beneficiaries beyond NVIDIA and Micron. AI data centers not only require GPUs and high-bandwidth storage but also demand power supply, cooling, sensing, connectivity, and control systems. As capital expenditures shift from cloud providers' budgets to actual construction orders, more small and medium-sized hardware companies are being included in the AI trading landscape.

Analysts also noted that second-tier AI concept stocks typically have lower liquidity and greater valuation elasticity, making their stock prices more sensitive to brokerage ratings and target price adjustments. Allegro's rise reflects the market's optimism about the diffusion of the AI hardware supply chain and demonstrates investors' willingness to pay a higher premium for companies benefiting indirectly from AI.