Allegro MicroSystems Soars to Two-Year High on Strong Quarterly Turnaround and Upbeat Guidance
Shares of Allegro MicroSystems, Inc. (NASDAQ: ALGM) rallied sharply on Thursday, closing at a two-year high following the company's stronger-than-expected quarterly results and an optimistic outlook for the current period. The chipmaker's pivot to profitability and significant sales growth highlight its strategic positioning in key technology markets.
During the session, the stock reached an intraday high of $39.89 before settling at $37.98, a gain of 9.93% for the day. The surge reflects investor confidence after Allegro reported a net income of $8.3 million for its fiscal third quarter ending December 2025, a notable reversal from a net loss of $6.86 million in the same quarter last year.
Quarterly net sales jumped 29% year-over-year to $229 million, driven largely by a 28% increase in automotive revenue—which includes a 46% surge in e-Mobility products—and a 31% rise in industrial sales. For the full fiscal year, net sales rose 21.5% to $646.9 million, with the company returning to an annual net profit of $1.59 million versus a prior-year loss.
"Our performance underscores the accelerating adoption of our sensing and power solutions, particularly in electric vehicles and data centers," said Allegro President and CEO Mike Doogue. "The momentum across our end markets gives us confidence in our trajectory."
Looking ahead, Allegro projects net sales between $230 million and $240 million for the fourth quarter ending March 2026, representing a year-over-year increase of approximately 22% at the midpoint. Diluted earnings per share are forecast in the range of $0.14 to $0.18.
The company's rebound is seen as a sign of resilience in the semiconductor industry, which has faced inventory adjustments and geopolitical tensions. Analysts note that Allegro's focus on automotive electrification and industrial automation aligns with long-term global trends, though competition remains intense.
Market Voices:
"This isn't just a quarterly beat—it's a validation of Allegro's technology in high-growth verticals," said David Chen, a portfolio manager at Horizon Capital. "The guidance suggests management sees sustained demand, especially from EV makers. It's a solid fundamental story."
"Let's not get carried away. One profitable quarter after losses doesn't erase cyclical risks," countered Maya Rodriguez, an independent trading analyst. "The stock ran up too far, too fast. If auto demand slows even slightly, these numbers could look very different next quarter. The market is celebrating prematurely."
"The data center growth is a quiet winner here," noted Arjun Patel, a tech sector consultant. "While everyone talks about EVs, Allegro's industrial segment—powered by data center expansion—is delivering record results. That diversification is a key strength."
"As a long-term shareholder, I'm relieved but cautious," shared Linda Fischer, a retired engineer and individual investor. "The turnaround is encouraging, but I want to see if they can maintain pricing power and fend off larger competitors. Execution over the next year will be critical."