Semiconductor Stock Semtech is Plunging on a Sales Warning. Here’s Where SMTC Could Find Support.

Semtech (SMTC) stock has plunged 26% ahead of the opening bell, after the semiconductor company said in a regulatory filing late Friday that it expects reduced sales for its CopperEdge products in fiscal year 2026. The revision stems from changes in server rack architecture and feedback from a key customer, and indicates no expected sales ramp-up during the fiscal year. 

Analysts have responded by lowering their price targets for Semtech, with Stifel reducing its target to $70 from $75 and Needham making a more substantial cut to $54 from $74, even as both brokerage firms maintained “Buy” ratings. SMTC stock has a consensus “Strong Buy” rating from 13 analysts in coverage, with an average price target of $77 - a substantial 41.3% premium to last week’s closing price.

More negative analyst notes could be coming for Semtech stock following the CopperEdge warning, as Wall Street was targeting more than 100% revenue growth for fiscal year 2026. Valued at 5.17 times forward sales, SMTC was already priced at a premium to expected revenue growth heading into today’s session, compared to the median tech sector premium of 3.26 times forward sales.

Today’s pre-market collapse has the semiconductor stock on pace to open below its 200-day moving average, which hasn’t been breached on a daily closing basis in nearly a year. SMTC has gained a staggering 174.89% over the past 52 weeks, but the stock is notably volatile, having already corrected more than 31% from their late January highs.

Traders should keep an eye on SMTC around the $40 level, where it’s finding a bit of premarket support. This round-number level has previously acted as a floor for the semiconductor stock on a few occasions over the past year, and also roughly coincides with a 50% retracement of SMTC’s 52-week high.