JPMorgan Doubles Soitec Price Target to €200 on Photonics Demand

Soitec shares surged more than 11% after JPMorgan upgraded the stock to Overweight from Neutral and doubled its price target to €200 from €98, driven by soaring demand for Silicon Photonics that eclipses headwinds in the mobile chip sector.

"Are overwhelmed by raised expectations for the Silicon Photonics business," said Craig McDowell, analyst at JPMorgan, in a note regarding the upgrade according to an Investing.com report.

Silicon Photonics Forecasts and Revenue Projections

JPMorgan's updated financial model projects that Soitec's Silicon Photonics business will generate more than €1 billion in revenue by fiscal 2030, operating at a higher contribution margin than the company has historically achieved according to the Investing.com report. This optical technology utilizes light rather than electrical signals to transmit data, making it critical for high-speed data centers handling intensive artificial intelligence workloads.

"A missing ~€80m of revenue in Mobile in FY29 is immaterial in the context of significant upside on SiPho," McDowell stated according to Investing.com.

Earnings Leverage and Market Valuation

The analyst note emphasizes that near-term weakness in traditional mobile device components is heavily outweighed by structural tailwinds in optical interconnects.

"And in our view the earnings leverage looks to be underestimated," McDowell noted according to the Investing.com coverage.

What Is at Stake for Semiconductor Manufacturers

The upgrade highlights how specialized material suppliers are decoupling from broader consumer electronics downturns by pivoting toward data center infrastructure. As hyperscalers scale up AI clusters, optical components capable of moving data between processors with lower latency have become a primary growth engine for advanced semiconductor foundries and wafer manufacturers.