Infineon Sets Sights on €2.5 Billion AI Revenue as Shares Surge to 26-Year High

Infineon aims to nearly double AI data center power chip revenue to €2.5B by 2027, while freezing new factory builds, sending shares to 25-year high.

Infineon Technologies has laid out an aggressive growth roadmap for its power chip business, targeting a near-doubling of revenue from AI data centers to €2.5 billion by 2027, while simultaneously freezing construction of new multibillion-euro factories. The twin-track strategy sent shares to their highest level in over a quarter-century, closing Friday at €73.19 — a 5.89% daily gain that pushed the stock above the €70 mark for the first time since the dot-com era.

The rally, which has propelled the DAX heavyweight up 91.07% since the start of the year, was fueled by a combination of strong sector tailwinds and company-specific catalysts. Nvidia’s blockbuster quarterly results lifted the entire semiconductor complex, while an analyst upgrade from Citigroup — which raised its price target to €80 — provided an additional jolt. Infineon was the best performer in the German blue-chip index, and the broader STOXX 600 notched its largest weekly advance in seven weeks, rising 0.73% on Friday.

At the heart of the growth narrative is the Power & Sensor Systems division, which Infineon expects to outpace the corporate average this year. The company now anticipates revenue of roughly €1.5 billion from power chips for AI data centers in fiscal 2026, climbing to around €2.5 billion in 2027. To support that ramp, the group is allocating investments of approximately €2.7 billion — much of it directed toward the production launch at its new Dresden fab. The factory, with a total cost of €5 billion, is scheduled to start operations in early July 2026, a full quarter ahead of the original plan. Most of the 1,000 new positions planned for the site have already been filled, underscoring the operational readiness.

The strong guidance follows a fiscal second-quarter performance that saw revenue hit €3.812 billion, with a segment result margin of 17.1%. Management has guided for third-quarter revenue of around €4.1 billion and now expects a marked increase in full-year sales — a clear upgrade from the “moderate” growth previously communicated.

Yet for all the expansion, Infineon’s leadership is pulling back on capital-intensive greenfield projects. Production chief Alexander Gorski stated that the era of building new billion-euro chip factories from scratch is over for now. Instead, the company will focus on better utilising existing sites and leaning more heavily on external manufacturing partners. The message to investors is clear: Infineon intends to grow without repeating the costly capacity build-outs that have weighed on balance sheets in the past.

The company is also broadening its technological base beyond AI. On May 20, it launched the pan-European research initiative “Moore4Power”, a consortium of 62 partners from 15 countries. Infineon leads the project, which aims to improve the efficiency of power semiconductors used in renewable energy, electric mobility, and industrial applications. This diversification gives the stock a second growth engine, insulating it from any potential cooling of the AI hype.

Geopolitical risks appear contained for now. US Trade Representative Jamieson Greer indicated that no immediate tariffs on semiconductors are likely to emerge from the ongoing “Section 232” review. While the protection of chip investments in the US remains a priority, any measures will be carefully timed.

Chartwise, the breakout above €70 establishes a new support level after the stock closed at €68.00 the previous session. The 200-day moving average stands at €40.34, underscoring how deeply overbought — and how powerful — the current trend has become. Over the past 12 months, Infineon’s shares have surged more than 110%.

Investors will have several opportunities to hear from management in the coming weeks: the DB Access Championship Conference in Frankfurt on May 27, and the BofA Global Tech Conference in San Francisco in early June. The next quarterly results are scheduled for release on August 5, 2026, which will provide the first real test of whether the AI revenue targets and capital discipline can be delivered in tandem.