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Investing.com -- Investors are likely to see Aixtron (ETR:AIXGn) as the “next AI power play,” Bank of America said, naming the German chip systems maker as its small- and mid-cap (SMID) top pick for 2026 on accelerating AI-driven demand.
Aixtron’s position in epitaxy deposition equipment makes it a critical “picks and shovels” supplier to several AI-linked end markets, including gallium nitride (GaN), optoelectronics, and silicon photonics, BofA analysts said in a Tuesday note.
The company sits at the center of a shift in data center architecture as rising compute intensity drives demand for higher power efficiency and faster data transmission.
Optoelectronics is expected to be a key growth engine through late 2025 and into 2026, following a sharp rebound in recent quarters, according to BofA.
Two-thirds of optoelectronics revenue in the third quarter was driven by data centers, reflecting the rapid buildout of silicon photonics as connectivity requirements rise, analysts noted. They expect another strong quarter in Q4 and see momentum carrying into 2026 as silicon photonics adoption broadens across the sector.
Further out, BofA sees gallium nitride emerging as a major AI power lever from 2027, driven by the move to 800V high-voltage data center architectures. As AI servers become more power-intensive, GaN is increasingly required inside server racks to improve efficiency and power density.
“Driven by NVIDIA’s 800V Rubin Ultra launch, we project Aixtron’s GaN revenue to increase 44% in 2027E,” with orders beginning in the second half of 2026, the analysts wrote.
“Given the criticality of performance and throughput of epitaxy tools, we expect Aixtron to maintain its dominance in GaN epitaxy (~90% market share) and wallet share as GaN adoption ramps in the coming years,” they added.
BofA reiterated a Buy rating and a €25.10 price objective on Aixtron. The bank said the valuation is justified by Aixtron’s growing exposure to AI-driven data center demand and its expected EBITDA growth rate, which it sees outpacing peers over the medium term.
