LSI jumps as 1Q profit beats Wall Street expectations

Pacific Growth analyst Kaushik Roy described it as a "blowout" quarter, noting that the company raised its forecast and beat analyst estimates for the third consecutive quarter.

Roy believes LSI has thrived on Wall Street's low expectations.

"We feel LSI has regained the confidence of investors. Interestingly, every quarter before LSI's earnings, the sentiment turns very negative," he said.

Deutsche Bank analyst Arnab Chanda took a less optimistic view and maintained his "Hold" rating on the stock.

He said that while the company's share price was low, he wanted to stay neutral, citing the weakening economy and LSI's lack of new products.

He also cited seasonal slowness and a significant inventory buildup at customer Seagate, which makes up 20 percent of LSI's sales.

LSI shares jumped $1.01, or 20.5 percent, to $5.98 in afternoon trading. They have traded in the past year between $3.75 and $9.98.