Alpha and Omega (AOSL) Surges 11.3%: Is This an Indication of Further Gains?

Alpha and Omega Semiconductor AOSL shares ended the last trading session 11.3% higher at $48.04. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 6.3% gain over the past four weeks.

Alpha and Omega Semiconductor benefits from strong demand in Advanced Computing (AI, servers and graphics), momentum with a Tier One U.S. smartphone customer, growing higher-performance application contributions, improved product mix, rising AI infrastructure power needs, and higher smartphone charging currents.

This chipmaker is expected to post quarterly loss of $0.23 per share in its upcoming report, which represents a year-over-year change of -1250%. Revenues are expected to be $168 million, down 4.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and 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 #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Alpha and Omega belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, GlobalFoundries Inc. GFS, closed the last trading session 6.4% higher at $85.83. Over the past month, GFS has returned 13.9%.

For GlobalFoundries, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.44. This represents a change of +4.8% from what the company reported a year ago. GlobalFoundries currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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