Does Allegro MicroSystems’ (ALGM) New AI-Focused Current Sensor Clarify Its Long-Term Power Electronics Edge?

• Earlier this month, Allegro MicroSystems introduced the ACS37017 Hall-effect current sensor, completing a high-performance portfolio that targets speed, power density, and accuracy needs in power electronics for AI data centers, electrified vehicles, and clean energy systems.
• The ACS37017’s integrated high-voltage isolation and factory-calibrated architecture, delivering a typical 0.55% sensitivity error over lifetime and temperature, underscores Allegro’s focus on ultra-precise current sensing for stabilizing high-voltage power conversion.
• With this new accuracy-focused sensor rounding out Allegro’s power electronics toolkit, we’ll now consider how it may influence the company’s investment narrative.

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Allegro MicroSystems Investment Narrative Recap

To own Allegro MicroSystems, you essentially have to believe in growing demand for precise power and current sensing across automotive, data center, and clean energy applications, and that Allegro can convert its product portfolio into durable design wins despite premium valuation and auto dependence. The ACS37017 launch reinforces the near term product story but does not, by itself, materially change the key catalyst of execution on AI data center and xEV opportunities or the central risk of pricing and competitive pressure.

Among recent updates, the promotions of Ian Kent to Senior Vice President, Operations and Jamie Haas to Vice President, Chief Technology Officer look most relevant, because operational discipline and focused technology leadership could be important if Allegro tries to scale its new sensor family across high growth end markets. These leadership changes sit alongside the ACS37017 introduction as potential supports for the thesis that Allegro can sustain differentiated product performance while managing costs and supply chain complexity.

Yet investors should also weigh how rising competition and ongoing price pressure could interact with Allegro’s premium valuation and concentrated exposure to automotive and China...

Read the full narrative on Allegro MicroSystems (it's free!)

Allegro MicroSystems' narrative projects $1.2 billion revenue and $249.0 million earnings by 2028. This requires 17.3% yearly revenue growth and a $317.6 million earnings increase from -$68.6 million today.

Uncover how Allegro MicroSystems' forecasts yield a $38.42 fair value, a 9% downside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were assuming revenue could reach about US$1.4 billion with earnings near US$154.0 million, and viewed supply chain localization as a key positive, but the latest sensor launch and leadership changes could either reinforce or challenge that more bullish view, so you should compare those assumptions with your own before deciding which storyline feels closer to your expectations.

Explore 3 other fair value estimates on Allegro MicroSystems - why the stock might be worth as much as $41.00!

Build Your Own Allegro MicroSystems Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Allegro MicroSystems research is our analysis highlighting 1 key reward that could impact your investment decision.
• Our free Allegro MicroSystems research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Allegro MicroSystems' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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