Soitec Stock Surges After JPMorgan Doubles Price Target on AI Demand

Shares of Soitec (SOIT) surged after JPMorgan analysts upgraded the French semiconductor materials manufacturer, more than doubling their price target on the back of soaring demand for the company's products used in artificial intelligence infrastructure.

JPMorgan's Bullish Re-rating

JPMorgan raised its rating on Soitec to Overweight from Neutral and lifted its price target to €200 from a previous €98, according to an analyst note. The bank's re-evaluation is driven by the company's rapidly expanding Silicon Photonics (Photonics-SOI) business, which supplies critical materials for high-speed data transmission in AI data centers.

Analysts at the bank now project that Soitec's Photonics-SOI revenue will surpass €1 billion by fiscal 2030. They also anticipate that contribution margins from this segment will be higher than the company's historical levels, signaling a significant re-rating of its long-term earnings power.

Surging Demand and Customer Agreements

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The upgrade follows Soitec's own recent upward revision of its financial outlook. Management raised its Q2 fiscal 2027 revenue growth forecast to approximately 50% year-over-year, a substantial increase from its prior estimate of 30%, attributing the change to accelerating demand from hyperscale customers.

JPMorgan's thesis is also supported by Soitec's growing use of Capacity Reservation Agreements. According to the bank, these long-term contracts with photonics customers lock in committed volumes and feature floating pricing mechanisms, providing greater revenue visibility and potential upside to current forecasts.

Market Reaction

In response to the news, Soitec's stock climbed 11.6% to €137.30 during the session. The rally was a standout performance, substantially outpacing modest moves in the broader European semiconductor sector and the French CAC 40 benchmark index, underscoring the company-specific nature of the catalyst.