The stock price of European chipmaker X-FAB Silicon Foundries SE (ticker: XFABF) surged as much as 77% during Wednesday's trading session. This dramatic move was triggered by a post from a prominent trader, known as "Serenity" with the handle @aleabitoreddit, who has over 400,000 followers on the social media platform X. The trader disclosed a position in the stock and described X-FAB as an "interesting long-term investment opportunity." By the market close, the gains had moderated to 33.56%, with the stock finishing at 12 euros. Trading volume for the day reached approximately 17 times the three-month average level.
The catalyst for the surge was a detailed post from the account "Serenity," which identifies as a veteran trader from the Reddit WallStreetBets community and an analyst specializing in AI and semiconductor supply chains. In the post, Serenity laid out a bullish thesis for X-FAB.
Serenity argued that artificial intelligence requires more than just GPUs; it needs "supporting infrastructure," and X-FAB is a potential beneficiary of "silicon photonics" technology. The post particularly emphasized that the market may be underestimating the depth of X-FAB's partnership with NVIDIA within the silicon photonics supply chain. In the power semiconductor sector, X-FAB, as a silicon carbide foundry, collaborates with companies like Navitas Semiconductor and Powerex to support NVIDIA's 800V DC power solutions.
Furthermore, Serenity pointed out that the upcoming "EU Chips Act II" could serve as a catalyst for European photonics companies, stating that "to some extent, with various subsidies in place, X-FAB's capital expenditures are essentially being paid for by the government." The post has garnered over 750,000 views.
In response to the unusual stock price movement, X-FAB CEO Damien Macq stated in an email that the company "has noted the recent increase in share price and trading volume but is not currently aware of any material undisclosed matters requiring disclosure."
It is noteworthy that X-FAB's closing price of 12 euros is more than double the analysts' average price target of approximately 5.5 euros. Data shows that among the eight analysts covering the stock, only one has issued a "Buy" rating. Berenberg analyst Trion Reid downgraded the stock from "Buy" to "Hold" earlier this month, advising investors to take profits following recent gains. Bernstein analyst Alexander Peterc also expressed caution, noting that X-FAB still appears to be lagging in the automotive industry recovery and that short-term earnings visibility remains limited.
This is not the first time Serenity has sparked significant rallies in European tech stocks. Previously, the account has also published investment theses on computer maker Raspberry Pi Holdings Plc, wafer manufacturer Soitec, and Swedish firm Sivers Semiconductors AB, all of which have recorded substantial gains this year. Since February, the account's follower count has skyrocketed from about 58,000 to over 410,000.