Deutsche Bank has reinitiated coverage of IQE PLC (AIM:IQE), the Cardiff-based compound semiconductor wafer manufacturer, with a buy recommendation and a 60p price target, representing an 11% upside from the last closing price of 54p.
Analyst John Karidis said the company is benefiting from very strong demand across several end markets, citing booming conditions in data centres and AI cloud infrastructure, military and defence, and satellite communications.
The note highlighted that IQE's recently completed strategic review has significantly strengthened its ability to monetise large near-term and upcoming opportunities.
Deutsche Bank's positive stance is subject to the completion of an £81 million funding package comprising equity and convertible debt, which the broker expects to close by the end of June.
IQE manufactures advanced semiconductor wafers used in a range of applications from wireless communications to photonics, positioning it as a supplier into several of the fastest-growing segments of the technology and defence sectors.
In late morning trading, the shares were off 5% at 51.18p.