ALGM
Allegro MicroSystems
Summary
What they do:
Design magnetic sensors, current sensors, and power management ICs for automotive, industrial, and data center applications — including SiC gate drivers and current sensors used in AI server power delivery — sitting at Layer 09 as a niche power semiconductor supplier with growing but still-small data center exposure.
Why they matter:
Allegro's current sensors measure power flow to GPU racks, and its new Power-Thru SiC gate drivers simplify high-voltage (800V) power designs for AI data centers. The company estimates AI content per rack at $425 vs. $150 for traditional servers — a 2.8x multiplier — but data center remains a minority of revenue behind automotive.
Recent performance:
Q3 FY2026 revenue $229M (+29% YoY), EPS $0.15 (beat $0.12 consensus). Q4 guidance: revenue $230-240M, EPS $0.14-0.18. Stock at ~$40, market cap ~$7B. Analyst target ~$46.
Our Verdict
A niche sensor and power IC company with a credible AI data center story — SiC gate drivers for 800V AI power delivery and 2.8x content uplift per AI rack — but data center is still a minority of revenue behind automotive, and growth acceleration has not yet materialized.
Structural trends
Structural
46
/ 100
Moat
4/10
Specialized magnetic sensor IP with modest design-in switching costs
AI Exp.AI Exposure
Stub~10% AI
Play Type
EmergingAI Growth
~65% CAGR
Rel. Value
34
FAIRPriceLIVE
$38.27
+0.60%
Live via Yahoo Finance · refreshes every 5 min
Market Cap
$7.1B
P/E Ratio
N/A
P/S Ratio
8.4x
52W High
$43.86
52W Low
$16.38
52W Chg
133.6%
Beta
1.70
Allegro MicroSystems designs analog and mixed-signal semiconductors — primarily magnetic sensors (Hall-effect, current, position) and power management ICs. The company has been an automotive supplier for decades: its sensors measure motor position in EV powertrains, current flow in battery management systems, and wheel speed for ABS. Automotive is the majority of revenue.
The AI data center story is newer and smaller. Allegro makes current sensors used in server power supplies and power distribution units (PDUs) to monitor power delivery to GPU racks. More recently, the company launched its Power-Thru SiC gate driver portfolio (AHV85003/AHV85043), which simplifies silicon carbide power designs for 800V AI data center, EV, and clean energy applications. The Power-Thru architecture eliminates external isolated bias supplies, offering the industry's smallest solution footprint for high-density 800V designs.
Allegro estimates that AI workloads will drive a 65% CAGR in data center power growth from 2023 to 2028, creating $425 of content per AI rack versus $150 for traditional servers. This 2.8x content multiplier is real but the base is small — data center is a growing but still-minority segment alongside automotive and industrial.
Q3 FY2026 revenue was $229M (+29% YoY), with e-mobility and data center driving growth. Q4 guidance is $230-240M. The company employs ~3,500 people with fabs in Thailand and test facilities in the Philippines. This is a $900M revenue company — small relative to power IC peers like Texas Instruments ($17B+) or Monolithic Power Systems ($3B+).
Supply Chain Dependencies
The Catch
Allegro is a $7B company trying to play in AI power management alongside MPWR ($45B+), Texas Instruments ($170B+), and ON Semiconductor ($25B+). The data center power story is real but the revenue proof isn't there yet — data center is buried in the industrial segment and likely represents less than 15% of total revenue. The Power-Thru SiC gate driver is a good product but entering a market where ON Semiconductor, Infineon, and STMicroelectronics have SiC scale advantages. Allegro's automotive sensor business provides stable revenue but doesn't benefit from AI. At ~8x P/S, the stock prices in growth acceleration that depends on a data center inflection that hasn't materialized. The risk is that Allegro remains a niche automotive sensor company with a credible but small AI optionality — not an AI infrastructure essential.
If They Win
If the 800V rack architecture becomes standard for AI data centers and Allegro's Power-Thru SiC gate drivers become the reference design for power conversion — if every AI rack contains $425+ of Allegro content in current sensors and gate drivers — then Allegro transforms from a niche automotive sensor company into an AI power management platform. Data center grows to 30%+ of revenue. Total revenue reaches $1.5B by FY2028. The company becomes an acquisition target for Infineon, TI, or ON at a premium. Market cap reaches $12-15B. Allegro's sensor expertise — measuring current and power with precision in high-noise server environments — becomes a defensible niche within the broader power management ecosystem.
Others in Power Regulation for the Server
Not financial advice. All scores generated via AI algorithms using public data.