Alpha and Omega Semiconductor Ready to Rebound, DOJ Cloud Lifts

    Alpha and Omega Semiconductor stock price

Key points

  • AOS is a leading developer and manufacturer of power semiconductors, which could be a recovery story in the second half as the bottom cycle for consumer electronics has begun.
  • Power semiconductors are chips that control electrical energy in devices and systems in numerous industries, including automotive, industrial, consumer electronics and renewable energy.
  • The US Department of Justice has concluded its criminal investigation without charges related to potential sales to Huawei during the 2019 blacklist.
  • 5 stocks we like best from Alpha and Omega Semiconductor

Power semiconductor developer Alpha and Omega Semiconductor Ltd. NASDAQ:AOSL produces computer chips that manage and control electrical power in numerous systems and devices. Regulation of electrical current flow is often taken for granted, but it is a crucial role that requires power semiconductors to perform properly.

AOS products help improve energy efficiency, reduce electronic system costs, and improve electronics performance in a wide range of industries, including consumer electronics, telecommunications, industrial, automotive and renewable energy. The company competes with STMicroelectronics NV New York Stock Exchange: STM, Infineon Technologies AG OTCMKTS: SENNY AND Vishay Intertechnology Inc. New York Stock Exchange: VSH in the IT and technology sector.

Common power semiconductors

Two of the most commonly used power semiconductors are MOSFETs and IGBTs. Metal oxide semiconductor field-effect transmitters (MOSFETs) regulate the flow of electrical current by varying the voltage applied to the gate terminal of a transistor. MOSFETs are one of the most common power semiconductors used in memory chips, microprocessors, and analog circuits that use computers, cameras, and smartphones.

Insulated-gate bipolar transistors (IGBTs) are high-power chips used to switch and amplify electrical signals. IGBTs are commonly used in inverters that convert DC energy to AC, such as solar inverters, battery backup systems, and electric vehicle (EV) motors. They are also used in television and computer power supplies, wind turbines, solar panels, industrial robots and railway systems. Obtain AI-powered insights on MarketBeat.

Standardization of electronic inventory

Inventory normalization is occurring across consumer electronics, industrial and automotive segments. Mobileye is experiencing inventory normalization as its manufacturing customers are depleting their ADAS chip inventory due to overstocks after post-pandemic supply chain disruptions were met with a demand shock as consumers picked up their discretionary expenses.

Inventory recovery and normalization

AOS reported fiscal second-quarter 2024 earnings per share of 24 cents, beating analysts’ expectations of 15 cents by 9 cents on Feb. 6, 2024. Revenue fell 12.4% year-over-year to 165.29 million dollars compared to analysts’ estimates of $165.29 million. Non-GAAP gross margin was 28%, down from 28.8% in the year-ago period. Non-GAAP operating profit was $8.4 million, down from $11.2 million in the same period last year. The company ended the quarter with $162.3 million in cash and cash equivalents.

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AOS issued in-line guidance for the fiscal third quarter of 2024 with expected revenues of $140 million to $160 million versus consensus analyst estimates of $159.17 million. Non-GAAP gross margins of 24% to 26%, taking into account lower plant utilization due to the Lunar New Year holiday in China.

The Department of Justice abandons criminal investigations.

The US Department of Justice (DOJ) closed a criminal investigation into AOS’s compliance with export control regulations related to transactions with Huawei and its affiliates during China’s trade bans in 2019. The indictment focused about potential unauthorized sales of products to Huawei during the United States. trade blacklist due to national security concerns in 2019. The Department of Justice closed its investigation without any charges. AOS will continue to cooperate with the U.S. Department of Commerce (DOC) in its ongoing civil investigations. Check the heat map of the sector on MarketBeat.

Signs of a bottom cycle

AOS CEO Stephen Chang commented that there is a recovery in desktop and notebook computers, smartphones and power tools. However, the recovery is partially offset by continued inventory correction in the gaming sector and weak demand for solar and fast chargers.

Chang commented: “Beyond normal seasonality, promising signs suggest that the cycle has bottomed. AOS’ diverse product portfolio mitigates near-term unpredictability, while positioning us to benefit from a broader market recovery in the second half of calendar 2024.”

History of the second quarter

Chang concluded: “More specifically, we are seeing encouraging near-term strength in graphics cards, data center AI accelerators, smartphones from Chinese OEMs, and electric mobility. We are confident that our leading technology, broad and diverse product portfolio, and world-class customer base strategically position AOS to navigate the current cycle and thrive in the upcoming one.”

Analyst Ratings and Price Targets of Alpha and Omega Semiconductor Ltd I’m on MarketBeat. The titles of Alpha and Omega competitors and competitors can be found with MarketBeat Stock Screener.

Alpha and Omega Semiconductor stock chart

Daily pattern of the descending triangle

The daily candlestick chart for AOSL illustrates a descending triangle pattern. The descending trend line consists of lower highs formed at $29.11 on January 24, 2024. The 200-period daily moving average (MA) attempted to hold support at $25.37 and even attempted a breakout, but stocks fell again after the earnings release. Shares fell to a low of $21.37 before falling back into the triangle range. The daily relative strength index (RSI) has moved away from the oversold 30 band. The pullback support levels are at $22.25, $21.02, $20.03, and $19.27.

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