Vishay surges 295% YTD as AI power demand reshapes semiconductor play

Vishay's rally is being fueled by demand for power-management components in AI servers, a market the company is capturing as data centers shift toward 800-volt architectures and 1.6-terabit optical networks.

"AI-related power applications were among the primary drivers of revenue growth, with customers increasingly adding Vishay semiconductors and passive components to AI server designs," management said during the first-quarter earnings call.

First-quarter revenue rose 17.3% year over year to $839 million, exceeding guidance and marking growth across all end markets, channels and geographic regions. The company's book-to-bill ratio reached 1.34, up from 1.2 in the prior quarter, while backlog expanded 21% to $1.6 billion — representing 5.7 months of demand visibility. Semiconductor book-to-bill stood at 1.47, showing continued order momentum.

Vishay trades at 2.08 times forward sales, a discount to Diodes Inc. at 2.86 times and a fraction of Lattice Semiconductor's 23.31 times. With 2027 earnings estimates up 52.5% since February and a Zacks Rank #1 (Strong Buy), the valuation gap suggests the market has yet to fully price in the company's AI-driven growth trajectory.

AI Power Demand Drives $1.6 Billion Backlog

Vishay's AI opportunity differs from that of its semiconductor peers. Lattice Semiconductor is capitalizing on AI data-center demand through FPGA and platform-management solutions, which helped fuel 42% year-over-year revenue growth in the first quarter. Diodes is benefiting from AI server-related applications, contributing to 22% revenue growth. Vishay, by contrast, focuses on the power-management layer — high-voltage MOSFETs, polymer capacitors, power inductors and current-sense resistors used in AI server power supplies and optical communication modules.

The company is also participating in next-generation AI infrastructure, including both 800-gigabit and 1.6-terabit network switches. Management highlighted increasing activity from telecom customers supporting AI optical communication networks.

Defense and EV Recovery Add a Second Growth Layer

Beyond AI, Vishay is benefiting from rising electronic content in vehicles. Automotive revenues increased in the first quarter as OEMs ramped up hybrid and EV programs. Management said Vishay is now the top resistor supplier for multiple OEMs launching new EV platforms and expects to support production growth through at least 2028. Design activity centers on battery management systems, ADAS, smart cockpits, power steering and electrified drivetrains.

Industrial demand is also recovering. Industrial Power revenues increased for a fifth consecutive quarter, supported by power transmission, renewable energy, smart-metering projects, factory automation and AI infrastructure investments.

Aerospace and defense adds another growth pillar. First-quarter aerospace-defense revenues climbed 14.1% sequentially and 16.8% year over year as U.S. and allied nations increased military spending. Vishay is supplying components for drones, radar systems, low-earth-orbit satellites, communications systems and hypersonic missile programs. Management believes defense demand is still in the early stages of a multiyear expansion.

Vishay's 295% rally is supported by fundamentals rather than speculation. The company's rising book-to-bill ratio, expanding backlog and growing market share suggest demand momentum remains intact. Yet the stock still trades at a discount to peers and the broader semiconductor sector. For investors seeking semiconductor exposure tied to AI infrastructure, EV adoption and defense modernization, Vishay offers a valuation cushion that many of its high-multiple peers do not.

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