Silicon Motion Technology (SIMO) reported Q2 revenue and margins well above expectations and issued a sharply higher Q3 outlook, driven by broad-based growth in embedded, automotive and artificial intelligence-related products, Wedbush said in a report Thursday.

Q2 revenue rose 127% from a year earlier to $451 million, topping the $403 million consensus estimate. Non-GAAP gross margin increased to 50.2%, while operating margin reached 23.1%, according to the report.

Ferri and boot-drive sales more than doubled sequentially and accounted for nearly 30% of revenue as demand grew across automotive and artificial intelligence infrastructure applications, the firm said. Wedbush also said sales of Silicon Motion's "MonTitan" enterprise SSD controllers likely exceeded its expectations.

Silicon Motion guided Q3 revenue to between $519 million and $541 million, with the midpoint about 23% above prior consensus expectations, the report said.

Wedbush reiterated an outperform rating on Silicon Motion Technology with a price target of $400.

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