Cohu (COHU) | News Based Sentiment Analysis

• On September 29, 2025, Cohu successfully closed an upsized $287.5 million convertible notes offering, providing approximately $278.9 million in net proceeds. This move, which included the full exercise of the initial purchasers' option, aims to strengthen the company’s balance sheet and support long-term growth, but also introduces potential dilution for existing shareholders, with an initial conversion price of $27.18 per share (a 32.50% premium over the September 24, 2025 closing price of $20.51).
• Despite concerns about potential dilution, Cohu reported second-quarter 2025 earnings that exceeded expectations on September 29, 2025, with earnings per share (EPS) reaching $0.02, beating the anticipated loss of $0.01. Revenue also surpassed estimates, hitting $107.7 million, a 2.9% year-over-year increase, signaling positive momentum despite broader financial challenges.
• Cohu continues to make strategic gains in key growth markets, with its Eclipse platform selected by a U.S.-based semiconductor manufacturer for testing next-generation processors, including AI computing devices, as announced on September 23, 2025. Additionally, they secured new orders for the Neon inspection platform for high bandwidth memory (HBM) devices, highlighting their competitive strength in high-performance computing.
• Analyst sentiment remains mixed, with Craig-Hallum maintaining a "Buy" rating as of September 25, 2025, while TipRanks' AI Analyst rated the company as "Neutral" due to ongoing financial challenges. This is reflected in recent insider selling activity, with four sales totaling 7,200 shares (valued at approximately $127,526) occurring up to September 24, 2025.
• Looking back to earlier in the month, on September 18, 2025, the selection of Cohu’s Eclipse platform was a significant win, exposing the company to next-generation processor markets. However, a September 19, 2025 analysis revealed that Cohu’s revenue has declined by 21% over the past year and 53% over three years, despite analysts projecting a 21% increase for the coming year.
• Voya Investment Management LLC demonstrated confidence in Cohu by increasing its stake by 40.5% on September 22, 2025, acquiring approximately 321,232 shares valued at $4.7 million. Paradigm Capital Management also significantly increased their holdings by 101.7%, suggesting continued institutional interest despite the convertible notes offering announced on September 23, 2025, which caused a stock drop between 10.01% and 10.10% that day.

The Investment Story: September was a month of contrasts for Cohu, marked by a significant capital raise alongside positive developments in AI and HBM, and mixed analyst sentiment. The company is attempting to position itself for future growth, but faces near-term profitability concerns and dilution risks.

What It Means for Investors: The convertible notes offering introduces dilution, but the continued institutional interest and new contracts suggest potential for long-term value. Investors should closely monitor the company’s ability to execute on its HBM and AI strategies and improve revenue growth, while being aware of the stock's recent volatility.

Looking Ahead: The October 7, 2025 CEO Investor Summit and the October 30, 2025 earnings release will be crucial events to watch. Investors should pay attention to management’s commentary on revenue growth, profitability, and the impact of the capital raise.

The Bottom Line: Cohu remains a speculative investment with potential upside in the growing AI and HBM markets, but carries substantial risk due to its current lack of profitability, revenue decline, and the dilution from the convertible notes offering. A cautious approach is warranted until the company demonstrates consistent earnings growth and improved financial performance.