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MACOM (MTSI) Boosts Data Center Reach With New Product Family

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MACOM (MTSI - Free Report) introduced the 226Gbps per lane technology product family in a bid to address the requirements of 1.6Tbps small form-factor optical module applications.

Notably, the new product family comprises transimpedance amplifiers, MATA-40734 and MATA-40736, an externally modulated laser driver, MAOM-011112 and a photodiode MARP-BP112.

The latest products are well-equipped to reduce the number of fibers required to carry 1.6Tbits of traffic by half. Also, these products allow the existing 800Gbps fiber plant to be reused for 1.6Tbps applications and the development of higher-density optical modules.

Growth Prospects

The latest move of the company positions it well to capitalize on the growth prospects present in the data center market.

 

According to a report from Statista, revenues in the data center market are anticipated to hit $342.1 billion in 2023 and reach $410.4 billion by 2027 at a CAGR of 4.7% between 2023 and 2027.

A report from Prescient & Strategic Intelligence indicates that the data center market is likely to reach $343.6 billion by 2030 at a CAGR of 5.1% between 2021 and 2030.

We believe MACOM’s growing presence in this promising market is expected to aid it in winning investor optimism in the near term.

Coming to the price performance, MACOM has gained 20.5% in the past year, outperforming the industry’s growth of 12.9%.

Expanding Portfolio: Key Catalyst

The latest move is in sync with the company’s growing efforts toward expanding its overall product portfolio.

Apart from the introduction of the 226Gbps per lane technology product family, MACOM recently acquired Linearizer Communications Group, which is likely to help it enhance its component and subsystem design capability.

Additionally, this acquisition is expected to expand MACOM’s footprint in the booming photonic solutions market.

Further, MACOM recently signed a definitive agreement to buy the assets and operations of OMMIC SAS. Notably, this acquisition is expected to drive MACOM’s momentum in microwave applications across the telecommunications, industrial, and aerospace and defense markets. Further, it will boost MACOM’s wafer production capability.

Moreover, MTSI’s footprint in the European markets is expected to get strengthened upon the completion of the buyout.

We believe that MACOM’s portfolio strength will continue to help it to sustain momentum among customers.

Zacks Rank & Stocks to Consider

Currently, MACOM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Agilent Technologies (A - Free Report) and Analog Devices (ADI - Free Report) . While Arista Networks sports a Zacks Rank #1 (Strong Buy), Agilent and Analog Devices carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks shares have gained 23% in the past year. The long-term earnings growth rate for ANET is currently projected at 14.17%.

Agilent shares have gained 3.4% in the past year. A’s long-term earnings growth rate is currently projected at 12%.

Analog Devices shares have gained 21.9% in the past year. The long-term earnings growth rate for ADI is currently projected at 12.25%.

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