Flop share from 2024 that could really take off in 2025.

Turnaround opportunity in the chip industry: Aixtron $AIXA (+0.02%)

We start with the German semiconductor supplier Aixtron (WKN: A0WMPJ). In recent years, the company's business and share price have developed rapidly. Driven by high demand for the company's highly complex systems, which are used to apply ultra-thin layers of atoms to semiconductor wafers, sales rose by an average of 25% p.a. between 2019 and 2023. The average growth rate for EBIT was even 42%! The share price rose by a whopping 351% from the beginning of 2020 to the end of 2023

This has come to an end in the current year. The share price has plummeted by 61% since the start of the year and things are no longer going so well operationally either. In the first nine months of 2024, turnover fell by 2% and earnings per share fell by 36%. Revenue is set to stagnate for the entire 2024 financial year and the management still sees no improvement in sight in 2025. What's going on here?

The main reason for the weak operating performance is likely to be the current market environment. The overall economic situation is currently also causing weak business for other semiconductor companies outside of the AI hype, such as Infineon. This is unlikely to remain the case forever. In the long term, demand for chips will increase - in the case of Aixtron, for example, to supply data centers with energy-saving power or to build modern charging infrastructure for e-cars. I am therefore betting that the share price could rise sharply again in the course of 2025. The P/E ratio of 11 (based on 2023 earnings) looks favorable.