Mizuho and TD Cowen raise Allegro’s target price; market seeks beneficiaries of the AI wave beyond leading stocks.

US-based sensor and power semiconductor solutions provider Allegro MicroSystems (ALGM) rose 14.7% on Monday, closing at $66.37 and hitting an intraday record high of $67.41. Mizuho Securities analyst Vijay Rakesh maintained the stock’s "Outperform" rating and raised its price target from $54 to $67, citing the company’s gains from surging demand for current sensors, fan drivers, and power semiconductors driven by the boom in AI servers. TD Cowen also named Allegro one of the "best picks" among small- and mid-cap stocks, setting a $70 price target. The firm notes that automotive electrification, autonomous driving, and AI data centers are all long-term growth drivers for the company, with its data center business currently accounting for around 14% of Allegro’s revenue. These rating adjustments signal Wall Street is seeking AI beneficiaries beyond Nvidia and Micron. AI data centers require not only GPUs and high-bandwidth storage, but also power supply, cooling, sensing, connectivity, and control systems. As capital expenditures from cloud vendors translate into actual construction orders, more small and mid-sized hardware firms are being included in AI-related deal pipelines. Analysts also point out that second-tier AI-related stocks typically have lower liquidity and higher valuation elasticity, making their share prices more sensitive to broker rating and price target adjustments. Allegro’s rally reflects market optimism about the expansion of the AI hardware supply chain, and also shows investors are willing to pay a higher premium for companies that are "indirect beneficiaries of AI".