Infineon’s Gallium Nitride Thesis Wins Over a Hedge Fund as Insiders Take Profits

A New York hedge fund pitches Infineon as a mispriced AI value chain leader, citing GaN chip growth, strong Q1 results, and a bullish 2029 revenue outlook.

A bold pitch from a New York hedge fund has thrown a spotlight on Infineon’s deepening role in the artificial-intelligence infrastructure play, even as a board member cashes out a chunk of his stake. The German chipmaker’s stock recently touched a 25-year high of €67.65, extending its year-to-date gain to nearly 69% before a 4.45% pullback on Wednesday brought it back to €64.64.

Kevin Salimian, founder of Voxel Capital and a former Lone Pine investor, took the stage at the Sohn Investment Conference on 12 May to make the case that Infineon is “deeply embedded in the AI value chain” yet trades at a discount to its growth potential. He projects 58% upside by the end of 2027, hinging the bulk of his argument on the company’s gallium nitride (GaN) chips. These power-management components are critical for data centre power supplies, solar installations and electric vehicles, and Salimian expects AI-related revenue to account for 25% of Infineon’s total sales by 2029.

The quarterly numbers released for the period ending 31 March 2026 support the thesis. Revenue came in at €3.8 billion, up 4% sequentially and 6% year on year. The Power & Sensor Systems division surged 26% to €1.26 billion, with margins above 20%. Free cash flow guidance was lifted to €1.65 billion from €1.4 billion, and management sees sales of roughly €4.1 billion in the current quarter. Energy solutions for AI data centres alone are expected to contribute around €1.5 billion in 2026.

Infineon is also streamlining its structure. From 1 July 2026 it will slim down from four to three divisions: Automotive, Power Systems and Edge Systems. The reorganisation pushes the AI-adjacent power supply business into the centre of the group’s strategy, aligning with Salimian’s view that the company is being mispriced relative to its position in the AI supply chain.

The rally has not been without controversy. Peter Gruber, a member of Infineon’s supervisory board, sold 10,001 shares at €61.76 apiece for a total of around €618,000. The transaction occurred shortly after an earlier all-time high, not the most recent peak, and is widely viewed by market observers as routine profit-taking rather than a red flag for the investment case. Still, the timing has drawn attention.

Chart signals are flashing caution. The stock sits roughly 63% above its 200-day moving average, and the relative strength index stands at 70.7 — a classic overbought reading that historically increases the probability of a short-term pullback.

Meanwhile, Infineon’s legal battle with Chinese competitor Innoscience is progressing in its favour. The Munich Regional Court handed down a first-instance ruling for Infineon, with further hearings on a second patent and a utility model scheduled for June 2026. In the US, a 60-day presidential review period still needs to elapse before any import bans can take effect. A clean sweep in these proceedings would further cement Infineon’s position in GaN technology — precisely the segment that Voxel Capital is betting on.

Wall Street is already pricing in further gains. JPMorgan, Jefferies and Goldman Sachs have lifted their price targets to between €74 and €75, implying roughly 15% upside from current levels. Whether that potential materialises depends on how quickly the AI data-centre business delivers the revenue infusion that both the hedge fund thesis and the bull-case forecasts anticipate.