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Learn Why The Bull Case For Allegro MicroSystems Stock Could Change Following 48V Product Launches

Simply Wall St · 1d ago
  • Allegro MicroSystems recently rolled out a 48V-focused ADAS and motion control portfolio for steer by wire, braking and related systems, including new gate drivers, an inductive torque sensor and a single chip 48V power management IC aimed at simplifying design and cutting bill of materials costs.
  • The same 48V and sensing technology that targets next generation vehicles is also aligned with Allegro MicroSystems' push into AI data center power and cooling, tying its product roadmap directly to two power hungry end markets that management has highlighted as key demand pillars.
  • We will now look at how Allegro MicroSystems' new 48V ADAS portfolio could shape the existing investment narrative around electrification and AI.

Scan Allegro MicroSystems' 48V and AI power story against a curated field of peers by zeroing in on 53 AI infrastructure stocks that could be setting up for the next major buildout cycle.

Allegro MicroSystems Investment Narrative Recap

To own Allegro MicroSystems, you need to believe the company can turn its position in auto electrification, ADAS and AI data centers into steadily rising high margin chip shipments. The analyst consensus Narrative on Simply Wall St leans on that idea, highlighting automotive and data center demand plus cost work that has already taken gross margin to 51.1% in the first quarter of fiscal 2027.

In the near term, the key swing factor is how quickly today’s bookings and multiyear high backlog convert into shipments without repeating past inventory digestion. The biggest operational risk remains China, where any faster shift to local suppliers or heavier pricing pressure could make that margin journey to the mid 50s much tougher.

The fresh 48V ADAS portfolio sits neatly beside Allegro MicroSystems’ recent launch of current sensors, gate drivers and motor drivers for 800V distribution and 48V cooling in AI data centers. Together, these lines put the firm inside two power hungry upgrade cycles, with data center already at 17% of sales and current sensors at 22% of that slice.

If Allegro executes on these products, the mix could support the margin ambitions outlined in the analyst consensus Narrative on Simply Wall St and help chip away at pricing and cost headwinds. Execution risk is real though. Any pause in AI data center buildouts or a reset in auto ordering could slow the ramp and reintroduce factory underutilization concerns.

Allegro MicroSystems' narrative projects US$1.6b revenue and US$399.8 million earnings by 2029. This assumes 16.6% yearly revenue growth and an earnings increase of about US$369 million from earnings today of US$30.9 million.

Uncover why Allegro MicroSystems' fair value indicates a 54% potential upside to its current price that could narrow quickly.

NasdaqGS:ALGM 1-Year Stock Price Chart
NasdaqGS:ALGM 1-Year Stock Price Chart

Exploring Other Perspectives

One alternative view treats execution risk as smaller and leans hard into Allegro MicroSystems’ upside. The most optimistic analysts were modeling revenue of about US$1.8b and earnings of US$416.5 million by 2029 before this 48V ADAS launch, which is far above consensus. As a result, you may want to compare several narratives that could now shift.

Explore 4 other Allegro MicroSystems fair value estimates, including one that suggests as much as 88% upside from the current price.

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Looking For More Ideas Beyond Allegro MicroSystems?

If Allegro MicroSystems has sharpened your focus on where power, chips and cash flows intersect, the next step is to widen the search and see how other businesses stack up on quality, value and resilience. The Simply Wall St Screener can help you quickly filter the market down to a short list that actually fits your investing style.