Shares of the French semiconductor materials firm rocketed more than 15% in Paris trading on Thursday, extending a blistering rally that has now pushed the stock up over fivefold this year.
Soitec lifted its fiscal second-quarter revenue growth forecast to approximately 50% on a constant-currency, like-for-like consolidated basis, up from its previous guidance of over 30%. The company attributed the upgrade to surging demand for its products amid the global artificial intelligence infrastructure buildout.
The revised outlook, disclosed Wednesday evening, comes as technology giants pour hundreds of billions of dollars into capital expenditure for data centers, fueling demand for advanced semiconductors and the specialty materials used to manufacture them.
Where the growth is coming from
Soitec, headquartered near Grenoble in southeastern France, specializes in semiconductor substrate materials—the foundational base layers upon which integrated circuits and chips are built for smartphones, tablets, and data center servers.
Steve Babureck, president of Soitec's U.S. operations and chief strategy officer, told an interviewer in May this cycle of AI capital spending is unprecedented in the semiconductor industry, calling the current market focus on data center operations a major opportunity for the company.
The Photonics-SOI catalyst
The company said Wednesday evening that its Photonics-SOI substrate business is on track to generate roughly three times the revenue it recorded in the same period last year, when the segment brought in about $25 million. Photonics-SOI substrates, which integrate photonic devices onto silicon-on-insulator platforms, are widely deployed in data center applications.
For the full fiscal year ending March 2027, Soitec now expects Photonics-SOI revenue to reach between $250 million and $300 million, compared with just over $100 million in the prior fiscal year. That forecast exceeds the company's earlier guidance of more than doubling year over year.
Analyst reaction
Citi analysts wrote in a client note that investors are likely to respond favorably to the strong momentum in the AI sector, adding that Soitec's guidance raise could drive consensus estimates for fiscal 2027 earnings up by a high single-digit percentage.
The company said the upgraded outlook reflects accelerating demand for Photonics-SOI substrates, improved customer order visibility, and its ability to flexibly adjust production capacity to match market needs.
Soitec continues to sign multi-year supply agreements with Photonics-SOI customers, and expects to finalize contracts with eight of its ten largest Photonics-SOI customers in the coming weeks.