On Wednesday, Deutsche Bank (ETR:DBKGn) analysts showed optimism for shares of Alphawave IP Group PLC (AWE:LN), raising the price target from GBP1.40 to GBP1.65 while reiterating a Buy rating on the stock.
The adjustment followed a robust fourth-quarter trading update from the tech company, which reported quarterly bookings of $186 million, significantly surpassing Deutsche Bank's estimate of $132 million and marking a year-over-year growth of 44%.
The surge in bookings was primarily attributed to custom silicon orders from North American AI customers, with typical deal sizes ranging between $10 million and $30 million. Alphawave also celebrated its first revenue in the opto-electronics sector, a notable achievement given its anchor relationship which is believed to be with Amazon (NASDAQ:AMZN).
Alphawave's annual results for 2024 were projected to be at the lower end of the previously guided range of $310 million to $330 million. However, the adjusted EBITDA was reported to exceed the prior target of $50 million. This financial performance was partly due to a favorable shift towards IP licensing, although there was a slight delay in custom silicon delivery.
The company's stock closed at 143.20p before the announcement, with the new price target representing an increase of over 15%. Deutsche Bank's analysis indicates confidence in Alphawave's growth trajectory and its ability to capitalize on the demand for its technology, particularly in the AI and opto-electronics markets.
The raised price target and maintained Buy rating reflect Deutsche Bank's view that Alphawave is successfully navigating its business strategy, as evidenced by the significant bookings in its fourth quarter and its achievements in the opto-electronics domain.
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