Infineon Shares Surge on Strong Revenue Forecast

Infineon Technologies AG (IFX.DE) stocks witnessed a remarkable surge, their highest in nine months, following the chipmaker's announcement of revenue projections exceeding analyst expectations. This uptick serves as a beacon of optimism amidst an industry facing prolonged challenges.

Raised Full-Year Outlook

In a statement released on Tuesday, the German chipmaker revised its full-year outlook upward. It now anticipates flat to slightly elevated fiscal 2025 revenue, a positive shift from its previous projection of a modest decline. For the current quarter ending March, sales are forecast to remain stable at €3.6 billion ($3.7 billion), surpassing analyst consensus estimates of €3.4 billion.

Outperforming Peers

Infineon's outperformance is attributed to its strong presence in the data center market, driven by the surge in artificial intelligence. Additionally, the company gained market share from competitors in the automotive sector, as stated by CEO Jochen Hanebeck during a post-results media call.

Impressive Stock Performance

On Tuesday, Infineon shares experienced an 11% increase to €34.58 during the Frankfurt trading session, reaching an intraday high of 13%, the highest since May. Over the past 12 months, the stock has gained approximately 3.3%.

Cautious Outlook

Rival NXP Semiconductors NV recently released a disappointing forecast, falling short of analyst estimates. Last week, Texas Instruments Inc. and STMicroelectronics NV also reported lower-than-expected outlooks. Bloomberg News revealed on Friday that STMicroelectronics may shed up to 6% of its workforce to mitigate costs and navigate the downturn.

Infineon's CFO, Sven Schneider, expressed concern over the uncertainty created by the Trump administration's tariffs, especially if it triggers retaliatory measures. "We are not including a significant escalation of tariffs in our guidance," Schneider stated to Bloomberg Television. "We still advocate for free trade. Escalating tariffs and counter-tariffs would be detrimental."

Marginal Adjustments

Infineon anticipates a 40% gross margin for the full year, marginally lower than its first-quarter margin of 41%, which was boosted by a one-time customer payment. Schneider indicated that a prolonged period of dollar strength would enhance the likelihood of exceeding the projected margin.