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Whereas S&P 500 tech shares Nvidia, AMD, and Micron are flying in 2026, there’s a £7 FTSE 250 inventory that’s outperforming all these names. I’m speaking about Raspberry Pi (LSE: RPI), which has gained about 140% yr up to now.
So what’s this inventory all about? And may traders take into account shopping for it?
Why’s the inventory hovering?
Raspberry Pi designs and develops high-performance, low-cost, single-board computer systems (SBCs). These are tiny, credit score card-sized computer systems that price round £50 and don’t have a case or a monitor.
Now, the explanation the inventory’s hovering proper now’s that customers have labored out that Raspberry Pi’s SBCs might be fairly helpful for synthetic intelligence (AI0 purposes. Just lately, individuals have been utilizing them to energy OpenClaw digital assistants.
Because of this, the corporate’s obtained loads of publicity on social media. This has boosted gross sales and earnings – income for 2025 was up 25% yr on yr to $323m whereas adjusted earnings per share was up 35% to 14.5 cents.
It has additionally led to vital curiosity within the inventory, with patrons flooding in not too long ago (it has been a bit ‘memey’). This has pushed its share worth up dramatically.
One different factor price noting is that within the firm’s 2025 outcomes, it mentioned that it noticed excessive demand for its semiconductors final yr (its different product line). For the primary time, semiconductors gross sales (8.4m models) eclipsed gross sales of boards and modules.
So that is not only a play on SBCs. It’s additionally a chip inventory (and chip shares are the most popular space of the market proper now).
Is there a possibility right here?
Is the inventory price a glance right this moment? Effectively it might be, if an investor’s searching for publicity to excessive momentum development shares.
Personally although, I really feel now’s not the very best time to be investing on this know-how firm. As a result of after its share worth surge this yr, it now appears very costly from a valuation perspective.
At current, the forward-looking price-to-earnings (P/E) ratio right here is about 80. That earnings a number of doesn’t depart any room in any respect for a slowdown in development or an operational setback (reminiscent of a rise in provide chain prices).
To my thoughts, the inventory’s overvalued at present ranges. I might get my head round a P/E ratio of 30 or possibly even 40, however not 80.
It appears analysts agree that the inventory’s overvalued proper now. At current, the typical analyst worth goal is £3.90 – that’s about 40% under the present share worth.
So whereas this UK-listed tech firm is little question thrilling (and has loads of development potential), I’m not satisfied it’s the very best funding right this moment given the valuation. If the share worth and valuation had been to return down although, there could also be a possibility to think about.
