Mizuho and TD Cowen raised their target prices for Allegro, as the market seeks beneficiaries of the AI wave beyond leading stocks.

According to Mars Finance, on June 30th, US-listed sensor and power semiconductor solutions provider Allegro MicroSystems (ALGM) rose 14.7% on Monday, closing at $66.37, after hitting an all-time high of $67.41 during the session. Mizuho Securities analyst Vijay Rakesh maintained his "outperform" rating on the stock and raised his price target from $54 to $67. The reason given is that the company is benefiting from increased demand for current sensors, fan drivers, and power semiconductors driven by the proliferation of AI servers. TD Cowen also listed Allegro as one of its "best picks" among small-cap stocks, giving it a price target of $70. The bank believes that automotive electrification, autonomous driving, and AI data centers are all long-term growth drivers for the company, with data center business currently accounting for approximately 14% of Allegro's revenue. These rating adjustments indicate that Wall Street is looking for AI beneficiaries beyond Nvidia and Micron. AI data centers not only require GPUs and high-bandwidth storage, but also power supply, cooling, sensing, connectivity, and control systems. As capital expenditures shift from cloud vendor budgets to actual construction orders, more small and medium-sized hardware companies are being included in the AI deal landscape. Analysts also noted that second-tier AI concept stocks typically have lower liquidity, greater valuation elasticity, and are more sensitive to brokerage ratings and target price adjustments. Allegro's rise reflects market optimism about the diffusion of the AI hardware supply chain and demonstrates investors' willingness to pay a higher premium for companies that "indirectly benefit from AI."