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Interest in GSI Technology (GSIT) has picked up after the company announced a government funded proof of concept for Sentinel, an autonomous perimeter security platform managing drones and cameras with partner G2 Tech.
The engagement, backed by the U.S. Department of War and a foreign government agency, is centered on integrating GSI’s Gemini II compute in memory architecture for on device AI inference. GSI expects about US$1 million for software optimization and system integration work.
See our latest analysis for GSI Technology.
The Sentinel announcement comes after a strong run in the share price, with a 30 day share price return of 52.46% and a 90 day share price return of 58.46%, while the 1 year total shareholder return of 103.80% and 3 year total shareholder return of roughly 3.6x indicate that momentum has been building over a longer horizon.
If this kind of AI focused defense work has your attention, it could be a good moment to see what else is available with high growth tech and AI stocks.
With the share price already up sharply over 1 year and the Sentinel proof of concept adding fresh excitement, the key question now is whether GSI Technology is still underappreciated, or if the market is already pricing in future growth.
Based on a P/S ratio of 11.8x, compared with both the wider US Semiconductor group and closer peers, GSI Technology currently sits at the expensive end of the range.
P/S compares the company’s market value to its revenue, so an 11.8x multiple means investors are paying US$11.80 for every US$1 of annual sales. For a business that is still loss making, this kind of multiple usually implies the market is placing a lot of weight on the potential of its technology and future contracts rather than on current earnings.
Against the US Semiconductor industry average P/S of 5.4x and a peer average of 5.8x, GSI Technology’s 11.8x multiple is more than double those reference points. That gap suggests the market is assigning a premium for its compute in memory and AI focused offerings, while also accepting the risks that come with unprofitable operations and a relatively small revenue base.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Sales of 11.8x (OVERVALUED)
However, you also have a company generating US$24.024m of revenue with a US$11.661m net loss. As a result, execution missteps or weaker contract flow could quickly challenge that premium.