Soitec's AI Photonics Boom Can't Mask a Core Business in Retreat
Published on 06/23/2026 at 17:45 | Redaktion boerse-global.de
The French semiconductor substrate specialist Soitec finds itself in an unusual bind. Its high-growth photonics division – a key supplier for AI data centres – has smashed through the $100 million revenue milestone ahead of schedule. Yet the stock is tumbling, dragged down by a stubborn slump in the smartphone market that continues to weigh on the company's bread-and-butter RF-SOI wafer business.
Shares slid nearly 9% on Tuesday to €120.35, leaving the stock almost 40% below the record high of roughly €200 hit in May. The sell-off follows a blistering run that saw the stock surge 380% since the start of the year, a rally driven almost entirely by expectations around Soitec's role in the artificial intelligence ecosystem. Now the market is taking a closer look at the numbers.
Analyst Divide Widens
The trigger for Tuesday's decline was a bearish call from Jefferies. The investment bank downgraded Soitec to "Underperform" and slashed its price target to €85, arguing that the shares are priced at a dangerously high EV/EBITDA multiple while the core RF-SOI business – which still accounts for more than half of group revenue – is suffering from a prolonged inventory correction in the mobile and automotive supply chains.
Should investors sell immediately? Or is it worth buying Soitec?
But not everyone is convinced the sell-off is justified. DZ Research has maintained a bullish stance with a €200 target, pointing to the rapid acceleration in photonics-based SOI substrates for high-performance AI chips. The divergence between the two camps underscores a fundamental tension at Soitec: the long-term AI story is real, but the near-term financials are being squeezed by a cyclical downturn in its largest end market.
A Tale of Two Businesses
The full-year results for fiscal 2025/26 illustrate the split neatly. Group revenue fell 34% to €592 million, hit by destocking across mobile and automotive customers. That dragged the EBITDA margin to 25.4%. Yet the photonics-SOI segment not only breached the $100 million revenue threshold earlier than management expected, but it also helped push free cash flow to a positive €63 million – well above analyst estimates and a sharp turnaround from the €23 million outflow a year earlier. Net debt stood at a comfortable 0.4 times operating profit.
Soitec executives are leaning into the strength of the AI opportunity. At the CEA-Leti Innovation Days in Grenoble, CEO Laurent RĂ©mont took the stage to highlight the company's role in developing energy-efficient chips for data centres. The group's silicon-on-insulator technology, alongside newer offerings like SmartSiC wafers for electric vehicles and FD-SOI for IoT, forms the backbone of its long-term roadmap.
What’s Next
Investors are now looking ahead to the first-quarter report for fiscal 2026/27, due in July. Management has guided for revenue growth of around 15% year-on-year. A more detailed strategic update is expected at the annual general meeting later this month. For now, Soitec remains caught between the promise of AI-driven photonics growth and the painful reality of an overhang in its core smartphone market. Whether Tuesday’s slide marks a healthy consolidation – or the start of a deeper re-rating – depends on how quickly the inventory correction runs its course.
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Soitec Stock: New Analysis - 23 June
Fresh Soitec information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
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