Bank of America has identified Technoprobe (BIT:TPRO) and Soitec (EU:SOI) as its preferred stocks among European small- and mid-cap semiconductor companies, citing their exposure to artificial intelligence infrastructure investment.
The bank’s assessment focuses on two areas of semiconductor technology: advanced processor testing and data centre connectivity.
Both companies have received upgrades from Neutral to Buy, reflecting Bank of America’s expectations for revenue growth, capacity expansion and improved operating margins.
The analysts expect investment by major cloud service providers in AI computing infrastructure to support demand for the technologies supplied by the two companies.
Technoprobe Upgraded on AI Testing Exposure
Bank of America upgraded Technoprobe from Neutral to Buy in May, identifying the Italian semiconductor testing equipment company as having the highest AI-related revenue exposure among the European small- and mid-cap semiconductor companies it covers.
According to the bank, approximately 50% of Technoprobe’s current revenue is linked to artificial intelligence applications.
BofA expects this proportion to increase to 70% by 2028, supported by demand for more complex semiconductor testing and developments in high-bandwidth memory (HBM).
Technoprobe supplies probe boards used in semiconductor testing, including products based on vertical microelectromechanical systems (MEMS) technology.
The bank highlighted the company’s position in graphics processing unit (GPU) probe boards and expects increasing testing requirements for central processing units (CPUs), application-specific integrated circuits (ASICs), HBM and silicon photonics to support its business.
Technoprobe Forecasts Revised Higher
Bank of America also pointed to Technoprobe’s 2026 financial guidance, which it said exceeded median market consensus estimates by 33% for revenue and 65% for EBITDA.
Following the company’s guidance, the bank raised its revenue growth forecast for the 2026–2028 period from 40% to 48%.
Its EBITDA growth forecast for the same period increased from 70% to 78%.
These revisions reflect the analysts’ expectations for additional demand associated with AI semiconductor testing and the potential contribution from higher-bandwidth memory applications.
The projections remain Bank of America’s estimates and are subject to future industry demand and company performance.
Soitec Upgraded on Silicon Photonics Opportunities
Bank of America upgraded French semiconductor materials manufacturer Soitec from Neutral to Buy on October 9.
The bank’s assessment centres on silicon photonics, a technology used to support high-speed optical data transmission in computing infrastructure.
According to BofA, Soitec holds approximately 95% of the silicon-on-insulator (SOI) wafer market serving photonics applications.
The analysts expect demand for optical connectivity in data centres to increase as AI infrastructure requires higher data transmission capacity.
BofA believes growth in optical port requirements could exceed growth in AI processor volumes, reflecting the increasing bandwidth requirements of large-scale computing systems.
This trend is expected to support demand for SOI wafers used in silicon photonics applications.
Singapore Capacity Expansion Under Consideration
Bank of America expects improved demand visibility to support a potential announcement by Soitec concerning additional manufacturing capacity in Singapore over the coming months.
The bank believes such an expansion could lead the company to revise its financial targets higher.
However, the anticipated capacity announcement remains an analyst expectation rather than a confirmed company decision.
BofA also acknowledged that Soitec’s share price has increased substantially during 2026.
As a result, its Buy recommendation is based primarily on expectations for capacity growth and margin expansion rather than the stock’s current valuation.
AI Infrastructure Investment Underpins Both Recommendations
Bank of America’s selections reflect two different areas of semiconductor infrastructure investment.
Technoprobe provides testing technology for advanced processors and memory devices, while Soitec supplies semiconductor materials used in optical connectivity.
The bank expects demand for both technologies to develop as cloud computing companies expand their AI infrastructure.
For Technoprobe, the principal factors include higher testing complexity, increasing AI-related revenue exposure and projected EBITDA growth.
For Soitec, the assessment focuses on silicon photonics demand, potential manufacturing expansion and the resulting implications for operating margins.
Both recommendations depend on the continuation of investment in AI infrastructure and the companies’ ability to deliver the anticipated financial performance.
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