MACOM Technology Solutions Holdings, Inc. (MTSI): A Bull Case Theory

We came across a bullish thesis on MACOM Technology Solutions Holdings, Inc. on Business Invest’s Substack by Francesco Ferrari. In this article, we will summarize the bulls’ thesis on MTSI. MACOM Technology Solutions Holdings, Inc.'s share was trading at $121.15 as of August 20^th. MTSI’s trailing and forward P/E were 106.64 and 29.85 respectively according to Yahoo Finance.

MACOM Technology Solutions Holdings, Inc. (MACOM) is a semiconductor company specializing in solutions for telecommunications, data centers, and defense applications. Its products play a critical role in fiber optics, radar systems, and 5G infrastructure, making it a key enabler of modern communication and defense technologies. Despite the strategic importance of its chips, the stock has faced significant market headwinds, currently trading at $36.28, down roughly 70% from prior highs, reflecting investor skepticism about near-term growth.

A reverse discounted cash flow analysis highlights this gap: while MACOM’s past three-year revenue compound annual growth rate (CAGR) stands at 11.6%, unlocking the stock’s current valuation would require a near-term revenue CAGR of 41.9%, underscoring the disconnect between expectations and operational reality. This suggests that the market may be overestimating future growth potential or mispricing risk factors, though it also presents a contrarian opportunity for long-term investors willing to consider the company’s critical technology footprint.

MACOM’s involvement in essential infrastructure markets like 5G and defense indicates durable demand, while the underperformance in stock price highlights the market’s counterintuitive nature, where strategic value may not be fully reflected in share price. For investors, this situation warrants careful consideration: while downside risks remain due to execution and macro uncertainties, the company’s technologies are integral to high-growth sectors, implying a potential rerating if growth expectations normalize or strategic catalysts emerge. Overall, MACOM represents a complex but intriguing investment case, blending high-tech market relevance with significant valuation dislocation, offering a nuanced risk-reward profile for both equity and strategic investors.

Previously we covered a bullish thesis on Taiwan Semiconductor Manufacturing Company Limited (TSM) by Stock Whisperer in May 2025, which highlighted TSM’s leadership in advanced chip manufacturing, strong financials, and alignment of technical, fundamental, and sentiment-driven tailwinds. The stock has appreciated approximately 19.07% since coverage. Francesco Ferrari shares a similar semiconductor focus but emphasizes MACOM’s upside and valuation dislocations in telecom, data center, and defense markets.

MACOM Technology Solutions Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held MTSI at the end of the first quarter which was 38 in the previous quarter. While we acknowledge the potential of MTSI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.