AT&S experiences unprecedented stock market rally thanks to AI boom

Trigger of the rally

The high debt ratio continues to be cited by analysts as a dampening factor for the share price, which justifies a lower valuation compared to competitors. The fact that investments of 1.5 to 2 billion euros are financed through long-term customer commitments should also reassure investors of the still highly indebted Styrians. The Philadelphia Semiconductor Index, a much-watched stock market barometer for chip companies listed in the USA, is also lagging behind the Styrians, despite its strong development of plus 128 percent.

Shares of the Styrian semiconductor supplier and AI beneficiary AT&S produce, among other things, circuit boards and IC substrates — i.e., the connecting elements between integrated circuits and circuit boards through which signals and power are transmitted. Among the customers are, with AMD and Intel, some of those companies that equip the data centers of the large tech corporations, the "AI hyperscalers."

Analysts see a suppliers' market

In a study from the end of May, analyst Daniel Lion of Erste Group spoke of a "suppliers' market" in the semiconductor segment for various components along the semiconductor and electronics supply chain — i.e., a situation in which market demand significantly exceeds available supply. At the same time, however, material costs would rise, and there is the risk that missing capacities will limit the growth of the entire AI supply chain, Lion warned. With a view to the growth market, analysts recently pointed, among other things, to the increasing use of "agentic AI," which not only processes inquiries but can also independently plan and pursue goals.

The price rally of recent months lifted the market capitalization of AT&S to approximately seven billion euros, putting AT&S in competition with Andritz for ninth place among the largest companies listed on the Vienna Stock Exchange. At times, the market value rose to more than nine billion euros, and thus above that of the steel group voestalpine and the insurer VIG. Even after a consolidation in recent weeks, AT&S still has a price increase of 820 percent on a twelve-month view.

Capital measures and valuation

Before the surge, profit-taking pushed the price for the shares of the Styrian semiconductor supplier and AI beneficiary to currently around 180 euros. Nevertheless, a majority of analysts are sticking to their buy recommendations. Of seven analysts listed by AT&S, a slim majority recommends the stock for purchase, with price targets of up to 600 euros.

In addition, the expansions of the AT&S plant in Kulim, Malaysia announced in mid-June went down well with shareholders. According to mandatory disclosures, the private foundations Androsch and Dörflinger separated from a good 270,000 shares for 200 euros each roughly two weeks ago, thereby reducing their combined stake by approximately 1.5 percentage points to around 34 percent.