IQE shares gave up gains after their AI photonics rally, with the stock facing scrutiny on sales multiples after this week’s late pullback.
- IQE ended Friday at 44.85p, gaining 6.79% on the session, but still off 4.2% for the week.
- The company trades at £596.97 million market value, or about 6.1x projected 2025 revenue.
- Board seats tied to MACOM and the Tower supply agreement push AI photonics into focus for next week’s trading.
IQE plc (LON:IQE) jumped Friday, but the Cardiff wafer maker still faces investors betting on a fast switch to AI data-centre chips after weakness in handsets. Shares finished at 44.85p on July 3, a 6.79% gain for the session, while the FTSE AIM 100 dropped 0.28%. Still, the stock is off 4.2% on the week.
The London Stock Exchange trades Monday to Friday, 8:00 a.m. to 4:30 p.m. local time. Sunday’s price reflects the July 3 delayed close. IQE shares will reopen for trade on Monday.
IQE shares saw a tight close-to-close drop this week, but traded in a wide range, according to MarketWatch data. The shares hit 49.84p Monday and dropped to 41.15p by Friday. Volume for the week came in at 71.0 million, below last week’s 149.9 million.
| Date | Close | Intraday range | Volume |
|---|---|---|---|
| June 29 | 46.95p | Traded between 45.50p and 49.84p | 14.3 mln |
| June 30 | 47.45p | Moved from 46.90p up to 48.95p | 6.1 mln |
| July 1 | 47.00p | Range was 46.00p to 49.60p | 18.0 mln |
| July 2 | 42.00p | Low at 41.60p, high at 46.70p | 22.1 mln |
| July 3 | 44.85p | Day’s range 41.15p to 44.85p | 10.5 mln |
The big number here is valuation. AJ Bell put IQE’s market cap at £596.97 million as of Friday. IQE’s 2025 revenue came in at £97.3 million, with adjusted EBITDA at £3.2 million, which fell 17.6% and 60.1%. That puts the shares at roughly 6.1 times trailing revenue. Even if the company hits its target of more than 20% revenue growth for 2026, the multiple only drops to around 5.1 times sales.
| Measure | Latest figure | Why it matters |
|---|---|---|
| Friday close | 44.85p | Shares jumped 6.79% Friday, but still down 4.2% over the last week |
| Market value | £596.97 mln | Stock is priced near 6.1x 2025 revenue |
| FY 2025 revenue | £97.3 mln | Revenue expected to drop 17.6% from last year |
| FY 2025 adjusted EBITDA | £3.2 mln | Adjusted EBITDA projected to fall 60.1% from a year ago |
| FY 2026 revenue guide | More than 20% growth | If the company only meets the bottom of the range, the valuation falls to about 5.1x sales |
| New fundraising shares | 332.2 mln | Represents roughly 25.3% of the company after admission |
Investors are seeing the impact of a changing business mix. IQE reported a 15% jump in photonics revenue for 2025, reaching £57.1 million, as defence orders and demand in AI and data-centre markets lifted sales. Wireless revenue slid 40% to £40.1 million, with IQE blaming weak mobile handset demand and extra inventory at customers.
Indium phosphide is now the key variable. IQE and Tower Semiconductor NASDAQ:TSEM on June 15 said they’ve signed a multi-year supply deal for InP epiwafers, covering optical connectivity for AI-focused data centers. There’s a first-year minimum purchase, a reciprocal supply agreement from IQE, and long-term volume targets. As part of the deal, Tower gave IQE a royalty-free license to its porous-silicon patents and they settled related lawsuits.
IQE Chief Executive Jutta Meier said in the Tower statement that with long experience in InP epitaxy and its large-scale production, the company is set to back new optical connectivity tech. Tower President Marco Racanelli said bringing the two together will give “both the performance and high volumes” needed for the next wave of AI infrastructure. IQE
The outlook for costs isn’t as clear. Meier told Reuters in May that prices on raw materials like indium phosphide and gallium are up due to shortages and export curbs from China. “We are working together with our customers to really ensure that we are sharing the pain of that pricing,” she said. Reuters
IQE’s balance sheet moved before the shares did. The company raised £81 million back in May, getting £45 million of that from MACOM Technology Solutions NASDAQ:MTSI. That split into £30 million in equity and £15 million via convertible loan notes with no interest. IQE said it would use the funds to pay down its HSBC revolving credit, cover working capital, and invest.
MACOM is taking seats in IQE’s boardroom. IQE said July 1 it named MACOM execs Robert Dennehy and David O’Carroll as non-executive directors, following a board appointment agreement. MACOM now holds an 11.5% beneficial interest in IQE’s issued share capital. “I am delighted to welcome Robert and David to the Board of IQE,” Chairman Mark Cubitt said. Investegate
Short interest is still around. ShortTracker, using FCA daily short data and filtering out anything under 0.5%, showed Two Sigma Investments holding a 1.00% short on June 23. That’s lower than the 1.84% it had on May 22.
Peel Hunt analyst Damindu Jayaweera told Reuters in May the shares were pausing after gains tied to the MACOM-backed sale. That pause hasn’t ended the rally. MarketWatch showed IQE up 797% for the year and up 346.71% over 12 months at Friday’s close.
The next test for the stock comes next week, as traders look to see if it keeps its AI-photonics premium after selling off July 2 then bouncing Friday. The price is already factoring in a cleaner order pipeline, fuller factory schedules, and more shared costs for tight materials. But the 2025 forecast still has losses, with adjusted diluted EPS at minus 2.82p.
