Deutsche Bank moved Aixtron shares to a Buy rating from Hold and increased its price target to EUR31 from EUR20 following the company’s fiscal 2025 results. The bank said the earnings release marked the end of a multi-month adjustment in market expectations.
Aixtron reported a robust fourth-quarter order intake that beat expectations, according to the bank’s note. At the same time, company management provided cautious opening guidance for fiscal 2026 and described a weak outlook for the first quarter of 2026.
Deutsche Bank observed that markets initially reacted negatively to the results but then rebounded quickly, which the firm interpreted as investors looking beyond the immediate weakness. In the bank’s view, the guidance effectively reduced market expectations and therefore limits the risk of further earnings downgrades.
Management has labeled fiscal 2026 a transition year. The company is forecasting flat-to-declining revenues in that period, attributed to a noticeable shift in business mix. Specifically, a deep cyclical trough in silicon carbide (SiC) tool demand is being offset by a roughly twofold expansion in the optoelectronics laser segment, according to the guidance referenced by Deutsche Bank.
Deutsche Bank expects the laser segment’s upcycle - supported by demand for AI data center infrastructure - to carry into 2027 and beyond. The firm based this outlook on the capital expenditure plans of major market participants and said the dynamic should set the stage for a strong re-acceleration in growth beginning in 2027.
The bank’s upgrade reflects a forward-looking view that near-term softness is manageable and that the company’s exposure to growing laser demand tied to AI data center deployment will become the primary growth driver beyond the transition period.
Context and implications
Deutsche Bank’s change in stance underscores a shift from short-term caution to medium-term optimism, anchored on the projected expansion of Aixtron’s optoelectronics laser business and the anticipation of renewed market demand starting in 2027.