「Stock Market Oracle」 Serenity Accumulates XFAB: Bullish on EU Chip Act 2.0 and Deep Integration with NVIDIA, $1.3 Billion Market Cap Seen as Undervalued

On May 27, Serenity, a highly influential senior trader on Reddit’s WallStreetBets (WSB), took to social media to reveal they had established a position in semiconductor company XFAB. The WSB standout flagged XFAB’s $12.8 billion current market cap as attractive and laid out their core reasoning behind the call. Serenity’s key catalyst? The upcoming rollout of the EU’s Chip Act 2.0 this week, which is expected to prioritize support for photonics firms. XFAB already benefited from the original Chip Act, and Serenity believes it’s poised to be included again this time around. The trader emphasized XFAB’s deep integration with NVIDIA across two high-growth sectors: silicon photonics/CPO and power semiconductors. For silicon photonics, XFAB is gearing up for mass production of NVIDIA’s photonics evaluative transceivers, optical switches, and other products via its “photonixFAB” project—a partnership Serenity says the market is likely overlooking. In power semiconductors, XFAB operates as a silicon carbide (SiC) foundry, collaborating with firms like Nanosilicon and Power Integrations to back NVIDIA’s 800V DC power solution. On valuation, Serenity noted XFAB’s current P/B ratio of roughly 1.29, which aligns with levels seen when they first took a position in SOI—signaling the stock is undervalued due to drags from its legacy business. They project XFAB’s long-term 2028 P/E ratio will fall between 6.5 and 8.5x. On the upside, XFAB has secured strong government backing: €128 million from the EU Chip Act plus $50 million from the U.S. Department of Commerce, with more funding likely on the way. Crucially, these funds essentially cover the company’s capital expenditures, per Serenity. Analysts added that if XFAB can mirror Soitec’s turnaround playbook—using its low P/B and high-growth divisions to shed the burden of its traditional automotive business—its current $1.3 billion market cap will prove extremely compelling. BlockBeats’ note: Serenity is a top WSB trader whose high-quality research is always available for free. Their analysis framework focuses on the NVIDIA AI chip supply chain: by digging into the indispensable “screw” components in chip manufacturing and packaging, they identify scarce upstream assets with strong bargaining power to position for growth.