BofA Upgrades Silicon Motion to Buy, Shares Gain 4%

BofA Securities upgraded Silicon Motion Technology (NASDAQ:SIMO) to Buy from Neutral, raising the price target to $90 from $55, citing multiple company-specific catalysts that position the stock for strong upside. As a result, the company’s shares rose more than 4% intra-day today.

The firm pointed to three key drivers behind the bullish shift. First, Silicon Motion is gradually growing its enterprise solutions business, capitalizing on partnerships with leading NAND manufacturers and U.S. tech giants—including NVIDIA—to expand its presence in data-heavy infrastructure.

Second, the company continues to post resilient topline growth and maintain high gross margins, with minimal exposure to U.S. tariffs thanks to strategic foundry sourcing through TSMC and strong pricing leverage.

The third potential catalyst lies in its ongoing legal dispute with MaxLinear. If Silicon Motion wins the Singapore arbitration case expected to conclude in late Q4 2025, it could receive more than $160 million in breakup fees. BofA believes a large portion of this payout may be returned to shareholders via special cash dividends, though the event remains unconfirmed.

In addition, the firm sees Silicon Motion well-positioned to benefit from surging sovereign investments in AI infrastructure, particularly through its MonTitan line of eSSD controllers and boot drivers, mirroring the demand uptick seen among memory chipmakers. Together, these catalysts support a compelling risk-reward profile and justify the stock’s re-rating to Buy.