Jefferies in a note dated Tuesday upgraded Aixtron SE to a "buy" from "hold" and raised its price target on the German semiconductor equipment maker to €27, up from €18.20. The brokerage said stronger-than-expected spending by hyperscalers and by makers of optical communications equipment should support Aixtron's optoelectronics business across 2026 and 2027.
The firm pointed to an accelerating capex backdrop among cloud and datacom customers as a driver of improved revenue visibility for Aixtron's deposition systems. Jefferies noted recent public commentary pointing to front-loaded capital expenditure among certain optical players and expects that pattern to translate into optoelectronics revenue strength for Aixtron next year and into 2027.
Aixtron shares closed at €20.32 on the prior trading day. The company supplies deposition equipment to the compound semiconductor sector, with a product set centered on planetary MOCVD systems used in applications from power electronics to optical data communications.
Jefferies called out two of Aixtron's largest optoelectronics customers for epitaxy tools - Coherent and Lumentum - saying both reported December-quarter capital expenditure roughly 35% above expectations. The bank said both companies discussed the prospect of front-loading capex into the first half of 2026. Specifically, Jefferies quoted Coherent as saying capex will "increase sequentially over the remainder of the fiscal year," and said Lumentum indicated visibility to a significant block of additional capacity beginning in the second half of 2026.
On that basis, Jefferies expects Aixtron's optoelectronics revenue to surprise to the upside, potentially coming in above seasonal norms in the first half of 2026. The bank's model produces revenue forecasts that sit about 8% higher than 2026 consensus expectations.
Looking beyond the near-term optoelectronics cycle, Jefferies highlighted medium-term demand drivers tied to gallium nitride. The bank cited NVIDIA's Kyber rack architecture, scheduled to launch in the second half of 2027, which Jefferies said is expected to employ 800V high-voltage direct current distribution. With utilization across the gallium nitride supply chain described as healthy, the brokerage expects power semiconductor manufacturers to place orders for epitaxy tools in the second half of 2026 or the first half of 2027 to build capacity ahead of demand. Aixtron is estimated to hold approximately 90% market share in gallium nitride MOCVD tools.
On silicon carbide, company management guided to a 20 percentage point decline in that revenue mix, which Jefferies interpreted as implying a roughly 70% decline in silicon carbide revenues to about €40 million. The bank described those comments as cautious, noting that the figure corresponds to only about three silicon carbide tool shipments per quarter and that China 8-inch silicon carbide orders could generate upside in individual quarters.
From a valuation standpoint, Aixtron trades at 19.5 times one-year forward EV/EBITDA on trough earnings, slightly above its historical average of 18 times but well below its prior peak of 31 times, according to Jefferies. The bank's new €27 price target is underpinned by a fiscal 2027 valuation assumption of 19.0 times EV/EBITDA on EBITDA of €177 million.
Jefferies raised its revenue forecasts for Aixtron to €568.5 million for 2026 and to €670 million for 2027. Those projections are 8% and 5% above consensus expectations for 2026 and 2027 respectively, in Jefferies' view.
Context notes and model positioning
Jefferies framed the upgrade as driven by a combination of near-term optical strength and a clearer medium-term growth path from gallium nitride adoption in AI data centers, alongside a de-risked view of the silicon carbide opportunity. The bank sees an attractive setup for a re-rating of Aixtron shares given the mix of cyclical and structural catalysts it outlined.
Share-price and market metrics referenced by Jefferies
- Prior close: €20.32
- New price target: €27 (from €18.20)
- Valuation on trough forward EV/EBITDA: 19.5 times
- Jefferies' 2027 EBITDA assumption: €177 million
- Jefferies' revenue forecasts: €568.5 million (2026) and €670 million (2027)
These figures form the basis for Jefferies' recommendation upgrade and updated financial model for Aixtron.