Shares of this little-known global chip firm are set to rise by 50%, Barclays says
Shares of Alphawave Semi , a U.K.-based technology company that designs custom chips and semiconductors, are expected to rise by more than 50% over the next 12 months, according to Barclays. The investment bank’s equity research team initiated coverage of Alphawave Semi with an “overweight” rating on Feb. 20 and expect the share price to rise to £1.60 ($1.92) per share. The stock was trading at £1.05 on Friday. Alphawave Semi, formerly known as Alphawave IP, designs microchips for routers, fiber optic cables and other networking devices. It also develops semiconductor products used as “accelerators” of data between a computer’s CPUs, GPUs, and memory modules. AWE-GB 1Y line The positive sentiment from Barclays comes after the company made two acquisitions that changed its business model. One acquisition was OpenFive, which gave Alphawave the ability to create custom silicon products using intellectual property it already owns. The other was Banias Labs, which expanded Alphawave’s patents and intellectual property. The takeover also included “hyper scalers” – a term used to describe cloud computing giants such as Amazon and Microsoft – as customers. “Our bullish stance is based on Alphawave’s leading IP position within the rapidly growing data centre space, which should drive sales and profit growth faster than other company in our coverage. The key now will be execution,” said analysts Simon Coles and Rohan Bahl in a note to clients on Feb. 20. The acquisitions mean that Alphawave can now use its own intellectual property in chip designs which are then produced at a foundry, Barclays noted, in a pivot away from its previous business model of collecting royalties for licensing its IP. The investment banks estimate that if Alphawave delivers on its ambitious revenue targets, shares could potentially be worth up to £2.55-£3.50 based on their estimates — a bullish view giving the stock 233% upside from its current price.
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