Aixtron’s Optoelectronics Gambit Pays Off in Orders, but Profits Still Lag Behind

Aixtron sees optoelectronics share jump to 52% of sales as AI data center demand fuels 30% order growth, lifting 2026 revenue outlook to €560 million despite Q1 losses.

The narrative around Aixtron has flipped at breathtaking speed. Just a year ago, optoelectronics equipment contributed a mere tenth of the company’s sales. By the first quarter of 2026, that share had catapulted to 52% – and the market is rewarding the pivot. The stock has surged roughly 141% since the start of the year and clocked a 250% gain over twelve months, closing Monday at €47.75, just shy of its 52-week high of €50.96.

The sheer pace of the rally – nearly 30% in the past month alone – reflects a fundamental shift in what investors believe Aixtron’s future looks like. What was once a play on silicon carbide (SiC) and gallium nitride (GaN) has become a story about laser components for the data-hungry world of artificial intelligence.

Orders spike, driven by AI data centres

Order intake in the first quarter hit €171.4 million, a 30% increase year-on-year, with almost 70% coming from optoelectronics. That category serves the MOCVD systems used to manufacture telecom and datacom lasers – the backbone of the transition from copper to fibre optic links inside AI data centres. Chief executive Felix Grawert described the moment as a “tipping point”, pointing to multi-tool orders that already stretch well into 2027. The resulting order backlog stood at €359.1 million at the end of March.

These orders are the engine behind a raised full-year outlook. Aixtron now targets revenue of around €560 million (previously €520 million) and expects an EBIT margin of 17% to 20%. For the second quarter alone, management forecasts sales of roughly €110 million, almost double the first-quarter level, as larger system deliveries start to flow.

Q1 shows deep losses under the hood

Those delivery ramp-ups cannot come soon enough, because the first-quarter income statement makes for grim reading. Revenue slumped to €59.4 million, barely half the prior-year figure. The operating result swung to a loss of €22.3 million, weighed down by one-off costs from a previously announced headcount reduction. Gross margin contracted to 18%.

The weak headline numbers, however, are partly a timing issue. Aixtron’s business model means revenue recognition lags orders, sometimes by several quarters. The cash flow statement offers a more reassuring picture: operating cash flow improved to €53.6 million and free cash flow reached €48.5 million. For the full year 2025, free cash flow came in at €199 million, well above net profit of €58.2 million.

Cautious analysts, a new factory, and a dividend

Despite the rally, sellside analysts remain measured. Several houses have raised their price targets but few see material upside from current levels. Berenberg sets a target of €42, DZ Bank €45, and Barclays €39 – the latter downgrading the stock to Equal Weight after the strong run. Only Citigroup strikes a more bullish note with a €55 target, acknowledging the optoelectronics momentum while leaving little room for error.

Strategically, Aixtron is investing for the shift. It plans a new production site in Penang, Malaysia, with a capital outlay of around €40 million, aiming for operational readiness by mid-2027. The move underscores management’s confidence that the current order wave is structural, not cyclical.

The ordinary annual general meeting is scheduled for 13 May 2026. The board has proposed a dividend of €0.15 per share for the 2025 financial year, and shareholders will also vote on a new authorised capital plan, including the option to exclude subscription rights.

GaN and SiC: still waiting for a rebound

For the second half of 2026, Aixtron expects a recovery in GaN demand. The outlook for SiC is more cautious: management sees no meaningful pick-up before late 2026, possibly early 2027. With the stock already pricing in a sharp turnaround, the delivery execution over the coming quarters will determine whether the rally has legs – or whether the optics have simply outpaced the reality.