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Alpha and Omega (AOSL) Surges 11.9%: Is This an Indication of Further Gains?

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Alpha and Omega Semiconductor (AOSL - Free Report) shares rallied 11.9% in the last trading session to close at $63.73. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 7.6% gain over the past four weeks.

The rally was driven by increased investor optimism as the company benefits from product portfolio, customer relationships and production capacity. Alpha and Omega is marching toward $1 billion annual revenues with much stronger and more sophisticated R&D capabilities and supply chain operations. The company is confident of its business model and strategic positioning, with most of its customers being the world’s leading OEMs in the markets it serves.

This chipmaker is expected to post quarterly earnings of $1.18 per share in its upcoming report, which represents a year-over-year change of +53.3%. Revenues are expected to be $194 million, up 14.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Alpha and Omega, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AOSL going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Alpha and Omega is part of the Zacks Electronics - Semiconductors industry. Diodes (DIOD - Free Report) , another stock in the same industry, closed the last trading session 1.3% higher at $91.75. DIOD has returned 1.3% in the past month.

Diodes' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.55. Compared to the company's year-ago EPS, this represents a change of +66.7%. Diodes currently boasts a Zacks Rank of #1 (Strong Buy).

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