Ams Osram, an Austrian chipmaker, has experienced a significant turnaround, with its shares surging approximately 176% since January. This growth is largely attributed to a comprehensive restructuring effort and a strategic pivot towards AI photonics. A key part of this strategy is the impending closure of a €570 million sale of its non-optics sensor business to Infineon, which is expected to reduce the company's annual financing costs from potentially €300 million to under €150 million by 2028. This deal, along with a €40 million sale of a fabless CMOS image sensor group to indie Semiconductor, is central to the company's deleveraging push, aiming to improve its net debt position of €1.071 billion as of March against €1.317 billion in liquidity.
Beyond financial restructuring, Ams Osram is betting on two technological areas: "slow and wide" optical interconnects for hyperscaler data centers and augmented reality (AR) smart glasses. The optical interconnect technology, demonstrated as a prototype, involves micro-emitter arrays and could see an accelerated revenue timeline, potentially involving an undisclosed partner speculated to be Meta. For AR, Ams Osram is already supplying components for current smart glasses and aims to be a key enabler for next-generation AI-powered AR smart glasses. The company estimates it can capture €50 to €100 of content per AR device and has secured an order for AI-driven AR smart glasses.
The market has responded positively to Ams Osram's restructuring and AI narrative, with the stock trading at €23.50, about 11% below its 52-week high of €26.10 reached in late May. This price is more than 50% above its 50-day moving average. Despite the rally, analysts remain divided, with two recommending a buy, two a hold, and one a sell. The completion of the Infineon sale is anticipated as the next significant catalyst, providing a clearer indication of whether the share price aligns with the company's fundamentals and its long-term cash-flow targets for 2027.
