This French AI stock is up 570% in 2026: Analysts see a further 90% upside

A French semiconductor company, Soitec SA, has experienced an extraordinary surge in its stock price in 2026, increasing almost sevenfold from €23 to €154. This remarkable performance has caught the attention of analysts, who now see a potential further 90% upside for the stock. The primary driver of this rally is Soitec's critical role in the artificial intelligence (AI) industry, supplying specialized silicon wafers for manufacturing optical chips used in AI data centers.

The company, based in Bernin near Grenoble, has over 2,000 employees and holds more than 4,700 patents. Its expertise in silicon photonics, a technology that enables faster and more energy-efficient data transfer between processors, has become increasingly valuable as AI data centers demand more optical connections. Soitec currently holds around 95% market share in supplying Photonics-SOI wafers, with no significant competitors posing a threat to its dominant position.

Bank of America, a major financial institution, recently upgraded Soitec from Neutral to Buy and raised its price target from €152 to €300, indicating a 90% upside potential. The bank attributes this bullish outlook to Soitec's technological expertise and manufacturing experience, which could become increasingly valuable as AI infrastructure grows. The company's latest forecasts suggest a 60% annual increase in wafer area required for photonic chips between 2026 and 2030, implying substantial demand for Soitec's materials.

However, this 570% rally still carries substantial risks. Soitec's revenue declined by 34% to €592 million in fiscal 2026, with mobile communications sales contracting 43%. The smartphone division contracted further in the June quarter, raising concerns about the recovery of the mobile business. Meeting the growing demand for photonics will require significant investment, with Bank of America expecting Soitec to announce an extension of its Singapore manufacturing plant costing around €700 million.

Additionally, the current valuation of Soitec at nearly 96 times expected earnings for the fiscal year ending March 2027 leaves investors vulnerable to potential slowdowns in AI infrastructure spending or emergence of competing technologies.