Earnings Watch: Is a hidden gem in France drowning in the Nvidia hysteria?
AI hype has been the dominant factor in equity markets this year and went in overdrive mode with Nvidia’s insane revenue outlook. Many US-based companies related to AI have responded to the AI hype but only a few European companies have felt the tailwinds from AI winds across the Atlantic outside of course ASML which investors are betting will see an order increase as higher demand for AI chips will mean more demand for EUV machines for producing the chips.
But underneath the technology giants related to AI there is a little French semiconductor company called Soitec that will report earnings on Wednesday. Soitec is French-based semiconductor company with a market value of €4.6bn and revenue of €863mn in the past year up 48%. The company has 2,000 employees with 20% of those people working in R&D. Shares in Soitec are down 15% this year reflecting a very different development than what we have seen in US semiconductor stocks.
Analysts are very positive on the company expecting revenue to grow to €1.9bn in the FY26 (ending 31 March 2026) with EBITDA growing from currently €276mn to €731mn as the operating margin expands. Analysts have a price target of €189 compared to the current price of €130 (45% upside potential). The company has a patented engineering substrate solution that allows for precise layering of wafers later used for chip manufacturing. Its Smart Cut technology makes use of both implantation of light ions and wafer bonding to define and transfer a thin single-crystal layer from substrate to another. It basically works as an atomic scalpel.