MaxLinear, ON Semiconductor, Diodes among Benchmark's favored tech supply chain stocks

MaxLinear (NASDAQ:MXL), ON Semiconductor (NASDAQ:ON) and Diodes (NASDAQ:DIOD) are among the tech supply chain stocks favored by Benchmark, as the research firm the supply chain moving toward "normalization" and strong demand in the second-half of the year.

"We continue to favor exposure to markets with strong secular growth dynamics and long-term thematic trends of electrification, electronification, factory automation, renewable energy, AI & ML, and data center connectivity, where consumer risks can be largely mitigated," analyst David Williams wrote in an investor note.

Also favored by Benchmark are Lattice Semiconductor (NASDAQ:LSCC), indie Semiconductor (INDI), and Ideal Power (IPWR).

MaxLinear is seen as a "bit of a contrarian call," given that shares are 50% below their 52-week high and the company is dealing with its fifth straight consecutive decline in quarterly sales. However, its 400/800G PAM 4 solution could be "attractive" as an alternative AI investment, with the potential for further gains if the communications end market rebounds, Williams posited.

"We think LSCC is one of the most compelling names for broad-based exposure to secular themes and share appreciation with revenue visibility of the next generation Avant product family a likely near-term catalyst," Williams wrote.

Ideal Power is favored because of its "differentiated technology and solid design win traction but in early-stage product ramps," Williams added.

Additionally, the automotive and industrial markets look to be nearing a bottom, which should benefit ON Semiconductor, Diodes and Indie, Williams said.

Alpha and Omega Semiconductor (AOSL) should benefit as the increased spending on artificial intelligence should result in power management demands increasing, while MACOM Technology Solutions (MTSI) is likely to see increased demand for connectivity, thanks to AI.