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Raspberry Pi (LSE: RPI) is likely one of the hottest progress shares within the FTSE 350 index proper now. During the last week, it has jumped round 90%.
Now, I’m sitting on a pile of money in the mean time and in search of funding alternatives. Ought to I purchase shares on this under-the-radar British laptop firm? Let’s focus on.
What’s it?
It’s been some time since I’ve coated Raspberry Pi. In reality, I haven’t written about it since shortly after its Preliminary Public Providing (IPO) in mid-2024.
As a reminder, the corporate designs and develops high-performance, low-cost single-board computer systems (SBCs). These are tiny, credit-card-sized computer systems constructed on a single circuit board which have a variety of functions and are sometimes utilized in colleges, universities, and laboratories.
Since its IPO, the corporate’s share worth has been up and down. However principally down.
So, I didn’t really feel like I used to be lacking out on something not proudly owning the inventory. Till not too long ago…
As a result of within the final week or so, the share worth has gone parabolic.
Why is the share worth surging?
There are a few elements behind this share worth spike. The primary issue was a inventory buy from CEO Eben Upton.
On Monday (16 February), it got here to gentle that he’d purchased 4,684 Raspberry Pi shares at a worth of £2.82 per share. This deal was price about £13,200.
Observe that Upton has purchased inventory on a variety of events this 12 months. I calculate that he’s spent round £150k on shares – a big amount of cash.
The second issue is speak on-line that the corporate may very well be a significant beneficiary of the AI increase. You see, individuals have not too long ago been utilizing the corporate’s computer systems (which might be purchased for round £40) to run an AI digital assistant referred to as OpenClaw.
There are actually tons of movies on-line about easy methods to run OpenClaw on a Raspberry Pi laptop. So, this has created numerous investor curiosity.
You could possibly additionally say there’s been a little bit of ‘meme stock’ worth motion right here. In current days, numerous scorching cash has flowed into the inventory on the again of chatter on social media.
Ought to I purchase now?
Will I purchase the inventory? Not proper now.
I do suppose there’s potential for sturdy income progress within the years forward. Particularly if the corporate’s merchandise stay in concentrate on social media.
Nonetheless, one situation that issues me is reminiscence shortages/costs. In a current buying and selling replace, the corporate mentioned that the price of the LPDDR4 DRAM utilized in a lot of its merchandise has “increased rapidly” in current months, with some main suppliers now indicating limitations of provide at excessive densities.
This situation might doubtlessly hit earnings. It might additionally constrain progress.
Observe that the corporate mentioned that it has enough LPDDR4 stock for H1 2026. However wanting past that, there’s uncertainty.
One other situation is the valuation. After the current share worth spike, the forward-looking price-to-earnings (P/E) ratio is about 50.
That’s excessive for a {hardware} firm. It doesn’t depart any room for error.
So, I’m going to go away the inventory on my watchlist for now. However different Fools could also be extra bullish.
