SLAB Should I Buy
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Silicon Laboratories Inc. (SLAB) is not a strong buy for a beginner, long-term investor at this moment. While the stock has positive momentum and a potential acquisition by Texas Instruments, the overbought technical indicators, hedge fund selling, and declining net income and EPS make it prudent to hold off on buying right now.
The stock shows bullish momentum with MACD above 0 and positively contracting, and moving averages indicating an uptrend (SMA_5 > SMA_20 > SMA_200). However, RSI is at 84.865, signaling an overbought condition. The stock is trading near resistance levels (R1: 204.949, R2: 222.44), which may limit immediate upside potential.
Acquisition by Texas Instruments, which could bring synergies and a premium for shareholders.
Revenue growth of 25.24% YoY in Q4
Gross margin improvement to 63.44%, up 16.90% YoY.
Hedge funds are selling heavily, with a 356.79% increase in selling activity last quarter.
Net income dropped by 88.73% YoY, and EPS fell by 89.04%.
Investigations into the Texas Instruments acquisition by Halper Sadeh LLC, which could delay or complicate the deal.
Overbought technical indicators (RSI at 84.865).
In Q4 2025, revenue increased by 25.24% YoY to $208.2M, but net income dropped by 88.73% to -$2.68M, and EPS fell by 89.04% to -$0.08. Gross margin improved to 63.44%, up 16.90% YoY.
Analysts have raised price targets to $231 due to the Texas Instruments acquisition, but ratings are mostly Neutral or Hold. JPMorgan downgraded the stock to Neutral, citing the acquisition terms, and Needham downgraded it to Hold.
