SiTime Corporation saw its shares skyrocket 28% on Thursday, closing at $797.31 after reporting a blockbuster first quarter that saw revenue nearly double, fueled by insatiable demand from AI data centers. The company's precision timing components, critical for synchronizing chips, servers, and data links, are becoming increasingly vital as AI workloads expand.
First-quarter revenue surged 88% to $113.6 million, up from $60.3 million a year earlier, driven by the company's communications, enterprise, and data center (CED) division. CED revenue hit $75.7 million, a staggering 158% year-over-year increase, accounting for two-thirds of total sales. The division's growth was powered by AI infrastructure components such as optical modules, switches, SmartNICs, and accelerator platforms.
Despite the revenue surge, SiTime reported a GAAP net loss of $5.2 million, or 20 cents per diluted share, reflecting stock-based compensation and acquisition-related charges. On a non-GAAP basis, net income was $38.9 million, or $1.44 per diluted share.
CEO Rajesh Vashist emphasized that precision timing is evolving from a niche requirement to a system-level necessity in AI infrastructure. During the earnings call, he noted that inference infrastructure can require two to four times more timing content per system compared to training infrastructure, highlighting the expanding opportunity.
Looking ahead, SiTime raised its 2026 revenue growth outlook to at least 80%, excluding any impact from the pending acquisition of Renesas Electronics' timing assets. For the June quarter, the company forecast revenue between $140 million and $150 million, with non-GAAP EPS ranging from $1.85 to $2.00.
Analysts responded swiftly. Needham's N. Quinn Bolton raised his price target from $450 to $850, citing new customer wins and increased business from existing clients. UBS's Timothy Arcuri lifted his target from $675 to $775, deeming SiTime's valuation increasingly reasonable as estimates climb.
Competition remains a key concern. SiTime's latest annual report flags rivals including Renesas, Texas Instruments, and Microchip Technology. The company's $3.2 billion deal to acquire Renesas' timing assets is expected to close later this year, but CEO Vashist cautioned that related revenue is still years away.
CFO Beth Howe warned that consumer products could become a larger part of the sales mix later this year, potentially pressuring gross margins despite strong CED performance. Customer orders also remain subject to change or cancellation with minimal notice.
The rally has sharpened focus on SiTime's valuation and the sustainability of AI-driven demand. While the company currently benefits indirectly from the AI data-center boom, the key question is whether it can translate this surge into lasting revenue growth while maintaining margins amid intensifying competition.
