Aixtron's Optical Business Is Carrying the Load — But the Share Chart Still Has Scars to Heal

Aixtron's AI-driven optoelectronics orders surge, but power electronics lag. JPMorgan cuts target to EUR 60, sees upside.

The German semiconductor equipment maker Aixtron is living through a tale of two markets. One side of the business is generating record order intake, powered by the insatiable appetite of artificial intelligence infrastructure. The other, a former growth engine, is still waiting for its customers to return in force. The result is a company whose outlook is far more optimistic than its share price suggests.

Investors got a fresh glimpse of that split on Monday, when the stock climbed 3.24 percent to close at EUR 37.61, building on momentum from an earlier session that saw the shares rise 2.89 percent to EUR 37.43. The catalyst was a round of analyst commentary following the company's half-year results, published on 30 July — and, notably, a conversation with management that left at least one Wall Street bank feeling upbeat.

Optoelectronics Takes Centre Stage

The engine of Aixtron's current success is optoelectronics, which accounted for roughly three-quarters of total equipment order intake in the second quarter. At the heart of this surge is the G10-AsP tool series, which produces components essential for optical data transmission in server infrastructure. As AI workloads balloon and data centres demand ever more bandwidth, these optical links are becoming standard — and Aixtron's deposition systems are the tools that make them.

The company's other pillar, power electronics, presents a far more muted picture. Serving electric mobility and renewable energy through silicon carbide and gallium nitride technologies, this segment has seen its end-markets recover more slowly than anticipated. While long-term prospects remain intact, according to market observers, a clear inflection point toward a broader market recovery has yet to materialise. Customer utilisation is improving gradually, but the turnaround is not there yet.

Management Signals Confidence

That mixed backdrop did not stop Aixtron's finance chief, Christian Danninger, from striking an upbeat tone in a conversation with JPMorgan analyst Craig A. McDowell. The tenor of the discussion was described as "extremely positive," with Danninger pointing to high and sustained demand in the optoelectronics business. The CFO did concede, however, that a return to growth in power electronics remains uncertain.

JPMorgan responded by trimming its price target on the stock from EUR 70 to EUR 60, while maintaining an "Overweight" rating. The revised target still sits well above the current share price, implying substantial upside if achieved. Berenberg, meanwhile, took a more cautious line, reaffirming its "Hold" rating with a EUR 42 price target. The bank acknowledged the strong second-quarter order intake as evidence of operational strength but cautioned that the shares are not yet cheap despite recent declines.

Across the Street, the analyst community is broadly constructive: of five analysts covering the stock in July, four recommend buying and one says hold, with an average price target of EUR 59.80. Targets currently range from EUR 42 to EUR 60.

Production Capacity for the AI Era

To meet the anticipated demand, Aixtron is building a new manufacturing and development facility in Penang, Malaysia. The site is designed to make production more flexible and to bring the company closer to key customers in Asia's semiconductor cluster. Financing for such projects was secured through capital measures earlier in the spring, and the expansion signals that management is holding firm to its long-term growth objectives despite the near-term softness in power electronics.

The numbers support that conviction. Aixtron is holding its 2026 revenue forecast at EUR 560 million, plus or minus EUR 30 million, and ended June with liquidity of EUR 816 million. The quarterly trajectory is steep: from EUR 59 million in the first quarter, the company expects around EUR 180 million (plus or minus EUR 20 million) in the third quarter, with the fourth quarter set to be stronger still, topping EUR 200 million.

A Chart Still in Recovery

Monday's gain marks a tentative stabilisation for the stock, which has been through a punishing stretch. Over the past 30 days, the shares lost nearly a quarter of their value, and they remain more than 40 percent below the 52-week high of EUR 62.68 reached in June. The relative strength index sits at 40.3, a neutral reading that signals neither oversold nor overbought conditions.

Jefferies sees the current level as a potential entry point following the broader chip-sector correction, while JPMorgan's reduced target still implies meaningful upside. The market's range of opinions — from cautious holds to confident buys — mirrors the company's own two-speed reality: a booming optoelectronics franchise offset by a power electronics division still awaiting its turn. The half-year report due at the end of July will show whether the optics momentum can numerically compensate for the weakness elsewhere.