Infineon: Important course set

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  Christian Ingerl
  Redaktor

The chip industry has found its pulse again. After the recent setback, when doubts about the sustainability of the AI boom and the valuations themselves briefly slowed down the sector, several encouraging signals have recently come from the industry, including from Intel, Texas Instruments and STMicroelectronics. The market reacted promptly: the Philadelphia Semiconductor Index marched to new record highs.

What makes the change in sentiment remarkable is that the tailwind is not only coming from the classic AI winners from the GPU camp, but increasingly from the second tier of the sector, i.e. where power supply, power electronics, analog technology and data center infrastructure interact. This is precisely what makes the current phase exciting for European semiconductor stocks. Because if the AI boom spreads from the top to the bottom, not only training and server processors will benefit, but also those companies that manage electricity, limit heat, process signals and electrify cars.

STMicro sends a clear signal

The latest look at the books of STMicroelectronics. Not only did the Group report better-than-expected revenue and profits for the first quarter of 2026, but the outlook for the current quarter also exceeded market expectations. Of particular interest to investors is the automotive business, which returned to growth. At the same time, the company’s management reported strong incoming orders, normalized inventories and new design wins in electric, hybrid and classic vehicles. In addition, there is the AI lever: management expects revenues in the data center environment to be well over USD 500 million in 2026 and well over USD 1 billion in 2027.

Dynamic start

This mixture of automotive recovery and AI fantasy is also Infineon into the spotlight. For the Munich-based company, this news is more than just friendly industry news; after all, Infineon is even more strongly positioned in the automotive chip market. The global market leader in automotive semiconductors has also made a good start to the 2025/26 financial year (September 30). In the first quarter, the Group generated sales of just under EUR 3.7 billion and achieved a margin of 17.9%. Automotive, by far the largest division, achieved sales of EUR 1.8 billion and a margin of 22.1%. In day-to-day business, the picture is quite clear: the traditional automotive chip business appears more stable, the inventory corrections have largely been digested and drivers such as software-defined vehicles, higher ADAS levels, comfort electronics and 48-volt architectures are gaining in importance, while e-mobility is picking up more slowly than many suppliers had hoped some time ago. In the Power & Sensor Systems segment, on the other hand, demand from AI servers in particular is providing a tailwind.

This is precisely where the new growth story comes in. In February, Group CEO Jochen Hanebeck increased investments for the current financial year to EUR 2.7 billion in order to expand capacities for power supply solutions in AI data centers more quickly. Artificial intelligence is helping Infineon to broaden its business model, while automotive and industrial are not yet at full throttle in all submarkets. For the current financial year, the Group expects sales of around EUR 1.5 billion in the AI-related business alone, rising to EUR 2.5 billion in 2027.

Pay(ing) day

The focus is now on the second quarter, the results of which Infineon will present on May 6. Revenues are expected to reach EUR 3.8 billion and the margin 17%. In the Automotive segment, the level from the previous quarter is expected, which means a slight year-on-year contraction, while Power & Sensor Systems is expected to grow by a good 30%. The topics of AI and data centers are having an increasing impact here. For the year as a whole, Infineon recently maintained its forecast of moderate sales growth and a margin in the high teens. In the medium term, however, the target is significantly higher: more than 10% sales growth and a margin of 25% are expected.

Infineon has already made a remarkable comeback on the stock market over the past six months, but not the strongest in the peer group. Over a six-month period, Infineon has gained around 58%, while STMicroelectronics has risen by almost 95%. In other words: Infineon has delivered strongly, but its rival has almost doubled its share price. This could be an indication that Infineon still has catch-up potential if the Group also delivers stronger-than-expected results on May 6.

Investment solutions

The Infineon share is clearly not a risk-free bargain buy, but it is one of the most exciting semiconductor stocks in Europe with an attractive risk/reward profile. Traders who want to bet on Infineon shares catching up with the competition can invest in the Long Mini Future LIBJJB from Julius Baer to realize this scenario. The leverage product offers a multiplier of 4.6 and thus profits disproportionately from rising prices of the underlying. The knock-out is located at EUR 42.2993, 18.5% away from the current price level. The mini future offers a little more leeway on the downside and therefore a lower risk SMEB2U from UBS. The stop-loss level is at EUR 31.6237, which conversely means a distance of 39%. However, this is at the expense of the leverage effect, which is “only” 2.5.

Cautious investors can invest in the Barrier Reverse Convertible RIFAEV from Bank Vontobel with a remaining term until February 2027. The product offers the prospect of a return of 10.1% p.a., with a barrier at EUR 25.16 – a solid 51% buffer.