Needham Names Axcelis Top Pick In SemiCap; Picks Monolithic Power In Semiconductors

Needham analyst Quinn Bolton maintained Axcelis Technologies Inc ACLS with a Buy and raised the price target from $77 to $100.
Bolton named ACLS as the top SemiCap pick for CY23 and added it to Conviction List as the analyst believes the company has several tailwinds that will drive upside to the current share price.
ACLS has substantial exposure to power devices with high ion implant intensity and benefits from growing CapEx investments by industry players increasing capacity to meet expected demand driven by the electrification of autos.
ACLS has lower exposure to advanced memory, likely to see the sharpest decline in WFE in 2023 due to pervasive oversupply and high inventory levels.
ACLS's position as one of only a few SemiCap companies will likely grow revenue in 2023 despite the WFE slowdown. The company's system backlog reached $1.1 billion as of 3Q22.
Line of sight to reach ACLS's $1 billion revenue plan in 2024, which should produce EPS of $6.25 or more.
Bolton boosted CY22 and CY23 WFE estimates and introduced a preliminary CY24 WFE estimate.
With elevated backlogs at leading equipment vendors, more robust spending in China on mature nodes and by Samsung Electronics Co, Ltd SSNLF is likely to delay the WFE trough to C2H23 while also increasing the trough level.
Bolton reiterated a Buy on Monolithic Power Systems, Inc MPWR with a $450 price target.
Bolton named MPWR Top Pick in Semiconductors for 2023 and added it to Conviction List.
MPWR has a history of outperforming the growth of the analog segment, and Bolton expects this trend to continue.
In the near term, the company has already acknowledged the slowdown in consumer-facing markets and accordingly tempered its near-term outlook.
MPWR has meaningful new greenfield product ramps and market share gains that should allow the company to outperform the growth of the overall analog industry in 2023 and over the longer term.
MPWR stands to benefit from meaningful market share gains in its Enterprise Data segment in 2023 and beyond.
MPWR is significantly expanding its content in new model year automobiles.
The company increasingly delivered system-level module solutions to customers, increasing the company's dollar content per system and masking customer complexity.
MPWR ramped foundry capacity to support $4 billion of revenue over the next 2-3 years.
Price Action: ACLS shares traded higher by 3.39% at $81.36 on the last check Thursday.
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