Alphawave IP – is a bidding war likely to follow on from US semiconductor group Qualcomm considering making an offer, shares 117p, brokers Target Price 160

07.04.2025

This was certainly no April Fools joke!

After a bit of a bid-buzz last Monday, 31st March, some five times the number of shares that are dealt on average were traded in Alphawave IP Group (LON:AWE).

The 5,453,997 shares dealt that day, left the closing price at 93.50p.

The next morning, Qualcomm Incorporated (QCOM), the NASDAQ-quoted semiconductor group, issued a statement to the market, noting the recent share price movement of Alphawave IP Group and confirmed that it is considering making an offer to acquire the entire share capital of Alphawave.

In response to the news, the group’s shares were traded up to 143p, before closing that day 43.50p higher at 137p, on the back of a massive 19,915,894 shares volume.

The subsequent market days saw around 12,217,050 shares traded, leaving the closing price on Friday evening at 129p.

This morning, as the market pulls back yet again, they are 12p lower at 117p.

However, I really do believe that this is ‘Game On’ and that the shares of the now £929m-capitalised Alphawave Ip Group could move considerably higher yet.

The Business

Set up in Toronto, Canada in 2017, by an expert technical team with a proven track record in licensing semiconductor IP, the mission of the Alphawave IP Group is to focus on the hardest-to-solve connectivity challenges.

It develops and sells connectivity solutions in North America, China, the Asia Pacific, Europe, the Middle East, Africa, and the UK.

It is a vertically integrated semiconductor company, with some 900 employees, offering silicon IP solutions, chiplets, custom silicon, and connectivity products.

It serves the data centre, artificial intelligence, 5G wireless infrastructure, data networking, autonomous vehicles, data storage, and solid-state storage markets.

Alphawave supplies cutting edge connectivity solutions for the world’s most demanding applications in digital infrastructure through the licensing of its IP, the supply of custom silicon, and, from last year, sales of its optical connectivity products.

Its technology services a critical need: enabling data to travel faster, more reliably and with higher performance at lower power.

Why invest in Alphawave?

In the group’s own words –

“Our business benefits from exposure to the exponential growth of data and the required investment in a more efficient and reliable digital infrastructure, such as data centres.

We support our customers with leading high-performance and power-efficient wired connectivity technology.

We monetise our IP through a vertically integrated business model (licence IP and silicon), delivering high revenue growth and strong cash flow generation, which supports further investment in growth.”

Analyst’s View

Analyst Janardan Menon, at Jefferies, upgraded his recommendation from ‘Hold’ to ‘Buy’ and increased his Target Price from 108p to 160p.

He noted that Qualcomm has until Tuesday, 29th April, to make an offer and has already stated that it is considering making one.

Menon stated that:

‘We believe such a bid is likely as the acquisition would provide Qualcomm with an entry into the data centre segment through both networking chips and custom solutions.

Valuations are still reasonable after the recent jump in the share price.

The previous ‘hold’ recommendation was based on a view that the cuts need to end before the stock can re-rate to its intrinsic value as a high growth player serving the AI and data centre markets.

However, we now believe that M&A interest would be sufficient to re-rate the stock.

We would not rule out counter bids, as well as Alphawave’s board holding out for a higher price.’

In My View

Alphawave - data centre technology

Yes, this really looks as though it is Game On with possibly more than just Qualcomm being interested in taking Alphawave IP while its shares, now at 117p, look so attractive – they were up to 181.60p just a year ago and could so easily see that price being topped if a bid-war ensued.