Lattice Semiconductor: Acquisition rumors boost stock price

The share price of Lattice Semiconductor experienced a significant increase of 7.8% after Bloomberg announced that the company is allegedly planning an offer for Intel's Altera division. This news caused a stir, as Altera is a major competitor in the market for Field-Programmable Gate Arrays (FPGAs). Although Lattice is currently valued at around $7.5 billion, whereas Intel once acquired Altera for $17 billion, additional partners from the private equity sector may be needed to realize the deal. The market reaction suggests that investors recognize the potential benefits of such an acquisition. By acquiring, Lattice could significantly expand its design and manufacturing capacities, resulting in stronger market penetration and a more global influence. Moreover, a competitor would be removed from the market, which could further advance Lattice in the semiconductor industry. Nevertheless, Lattice Semiconductor's stock remains volatile and has experienced 23 fluctuations over 5% in the past twelve months. Historically, today's increase is significant but not fundamentally changing the company's image in the eyes of market participants. Four months ago, the stock fell by 18.1% following disappointing quarterly numbers. Both revenue and earnings per share fell short of Wall Street's expectations. The forecast for the coming quarter was also not optimistic, leading to a downgrade by a Bank of America analyst. Since the beginning of the year, Lattice shares have fallen by 15.5% and are at $57.75 per share, significantly below the 52-week high of $83.57 in March 2024. Interestingly, investors who invested $1,000 in Lattice five years ago would now have assets of $2,966. Drawing on insights from the historical work "Gorilla Game: Picking Winners In High Technology," software stocks utilizing AI technologies could be the future winners. In this sense, we recommend our free special report, which introduces a profitable and rapidly growing software company already benefiting from the automation wave.