Copyright Benzinga
NXP Semiconductors NV (NASDAQ:NXPI) delivered its strongest quarterly growth since 2021, supported by improvements across all regions and end markets. The company expects an above-seasonal December quarter as automotive shipments align more closely with end demand as industrial and IoT markets show early signs of recovery. JP Morgan analyst Harlan Sur maintained a Neutral rating on NXP and raised the price forecast from $240 to $245. Also Read: Why This Analog Semiconductor Stock Is A Top Undervalued Pick Sur said NXP delivered solid September-quarter results that aligned with expectations, supported by sequential growth of 8% — its strongest quarterly gain since 2021. The company saw improvements across all regions and end markets, driven by a stronger customer backlog, healthier direct order trends, and steady turns business without major pull-ins or push-outs, the analyst noted. He said that NXP's December-quarter outlook signals an above-seasonal fourth quarter, continuing the company's trend of accelerating year-over-year growth. In the automotive segment, NXP has begun shipping closer to end demand after nearly two years of under-shipping to Tier 1 suppliers, Sur noted. However, despite lean inventories, Tier 1 customers remain cautious due to macroeconomic uncertainty, leaving the near-term outlook modest. He added that a restocking phase could trigger a sharp rebound in automotive revenue once sentiment improves. Sur also highlighted encouraging signs of recovery in the Industrial and IoT markets, where revenue appears to have bottomed in the second quarter and is now rebounding in the second half of 2025. Looking ahead, management expects a typical seasonal decline in the March 2026 quarter, which the analyst considers achievable given improving demand trends and cleared customer inventories. He also pointed out that additional channel restocking could lift revenue in 2026 as NXP targets a return to 11 weeks of distributor inventory from roughly 9.5 weeks in the fourth quarter of 2025—potentially adding about $150 million in sales. Sur said NXP's third-quarter revenue of $3.17 billion rose 8% sequentially (down 2% year-over-year), slightly exceeding expectations with broad-based strength across segments. Automotive grew 6% quarter-over-quarter, Industrial/IoT 6%, Mobile 30%, and Communications Infrastructure 2%. Gross margin was 57%, and EPS came in at $3.11, narrowly missing consensus. For the December quarter, NXP guided for $3.3 billion in revenue at the midpoint—up 4% sequentially and 6% year-over-year—driven by momentum in automotive and industrial markets, with a gross margin outlook of 57.5% and EPS guidance of $3.28. Sur raised his estimates to reflect improving cyclical trends and a steady demand recovery, seeing NXP as well-positioned for continued growth as the semiconductor cycle strengthens into 2026. Price Action: NXPI stock is down by 2.59% to $207.42 at the last check on Wednesday. Read Next: Supermicro Smashes AI Trading Records With Intel And Micron — What’s Powering The Surge? Photo: Shutterstock
