On Thursday, Goldman Sachs revised its rating on shares of ACM Research, Inc. (NASDAQ:ACMR), lifting the semiconductor company from Neutral to Buy. The firm also increased the stock's price target significantly to $39.00, up from the previous target of $22.10.
The upgrade comes as Goldman Sachs recognizes the positive momentum in the capital expenditure (capex) cycle within the semiconductor industry, which began in November 2023.
This reassessment has led to a more favorable outlook on ACM Research, particularly due to the company's growth in China's mature nodes capacity, product line expansion, and customer base enlargement.
Prior concerns about the China semiconductor production equipment (SPE) market have been mitigated as local customers are seen to be increasing capex and expanding mature nodes, which bolsters the growth of China SPE. This shift in the market underpins the upgraded rating and the new price target for ACM Research.
The company's financial performance in the fourth quarter of 2023 further supports the positive assessment. ACM Research's revenues exceeded expectations, surpassing the guidance by 13%, Goldman Sachs estimates by 11%, and Bloomberg consensus by 14%.
Moreover, the company's revenue growth for the year 2023 was reported at an impressive 43% year-over-year, outstripping the growth of China's wafer fab equipment market, which excludes lithography, by a significant margin.
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