Ticker: $AMSSY (OTC) - AT0000A3EPA4 on Euronext Current Price: CHF 8.96 Implied Upside: +20% (Bear) to +680% (Bull) Market Cap: ~€1.1B

I am back into investing and trying the navigate the Iran crisis. Photonics are now getting a proper re-rating by the market after the major NVDA announcements. I've been on a FOMO for missing all the +300% stocks and been looking for the next re-rating candidate. It is AMS-osram

My folder for more documentation & my small valuation model :

https://drive.google.com/drive/folders/1kkF4tnVcaRJ7DpNCqLtPxRqwuIRbN0lP?usp=sharing

The Setup: Why is this in the trench?

If you haven't followed the European tech scene, ams-OSRAM is the poster child for "merger from hell." In 2020, ams (the sensor guys) bought OSRAM (the lighting giants) and it went ... not good. They saddled themselves with massive debt right before the microLED market cratered. This market is highly cyclical and inventories for microLEDs are very high right now.

In 2024, they lost a "cornerstone" microLED project (widely rumored to be Apple), the stock halved, and everyone left it for dead.

We have an industrial giant known with 20+ years of experience. The market is trading a 2024 trauma and ignoring the 2026 and 2027 reality. It is trading the wrong peers (see for example JP Morgan report attached). It has not watched GTC. It has not listened to $1tn CAPEX Jensen saying out loud to the investor world : we will need all the photonic capacity we can find.

Also, it is listed in Switzerland (think : low WACC) - country with great taxation and visibility in geopolitics + attractive capital markets.

The Catalyst: The Infineon sale

On February 3, 2026, management finally did what they promised: they sold the non-optical analog/mixed-signal business to Infineon for €570 million in cash.

Think about the math here:

• Total Market Cap: ~€1.1B * Cash in from one deal: €570M (roughly 50% of the market cap) * Implied multiple on that sale: 9.5x EBITDA, while the rest of AMS is trading at a "distressed" 4.3x.

This isn’t just a sale; it’s a deleveraging nuke. It drops the pro-forma leverage from 3.3x to 2.5x (including the OSRAM puts) or as low as 1.6x without them.

Yet markets are pricing a bankruptcy and ignoring the photonic turnaround.

The Numbers: My Valuation Model

I’ve run a full pro-forma valuation based on the post-Infineon capital structure. Even if you use a conservative WACC of 11% (because Europe is scary - but Switzerland is really not so you should look lower) and a 2% terminal growth rate, the numbers are stupidly skewed to the upside.

|Scenario|2030 EBITDA|Exit Multiple|Implied Price (CHF)|Upside| |:-|:-|:-|:-|:-| |||||| |Bear Case|€550M|4.5x|CHF 10.77|+20%| |Base Case|€860M|6.0x|CHF 36.56|+308%| |Bull Case|€1020M|8.5x|CHF 70.27|+684%|

Note: The Bear Case assumes the "Simplify" program fails and the legacy lighting business dies faster than expected. Even in the Bear Case, you are in the green.

Relative Valuation: Peer Comparison

AMS is currently trading at 4.3x EV/EBITDA. Look at the guys they are actually competing with now that they’ve trimmed the fat:

• Lumentum ($LITE): 16.1x * Coherent ($COHR): 22.5x * onsemi ($ON): 26.5x * Peer Median: 6.1x (Conservative benchmark)

If AMS re-rates to even the median of its peers as the debt risk vanishes, the stock is an easy triple. If it gets the US-style "Photonics Powerhouse" multiple (15x+), we’re looking at a multi-bagger that would make Buffet blush.

The Secret Sauce: "Simplify" program and Digital Photonics

Management isn't just sitting on their hands. They reached their "Re-establish the Base" savings target one year early (hitting €220M in savings).They just launched the "Simplify" program to cut another €200M by 2028.

They are pivoting hard into:

1. Automotive AI: Intelligent EVIYOS LEDs for software-defined vehicles (Design wins >€5B). They will benefit from the next EV and Self Driving Cycle 2. AI Data Centers: Laser diodes for high-speed optical interconnects (the picks and shovels for the GPU boom). 3. Medical/Industrial Sensing: High-margin optical sensors that aren't tied to the crappy smartphone cycle.

And these guys have a track record for execution. It's an old company with experienced employees and industrial excellence.

The Risk (Because I'm real)

• The OSRAM Put Options: There is a €505M contingent liability for minority shareholders. However, the Infineon cash-in is specifically earmarked to handle this. * FX Risk: They are sensitive to a weak USD. Hence tariffs and crashing dollar have weakened it's P&L in the past year. * Credit Rating: Currently at B3 (Moody's). A successful refinancing of the 2027 convertibles using the new cash is the "Golden Cross" for a rating upgrade.

TL;DR / The Bottom Line

ams-OSRAM is a top-tier optics / photonics company trapped in a garbage-tier balance sheet. The Infineon deal just fixed the balance sheet. You are buying a company with €3B+ in revenue and world-leading photonics IP for a valuation that implies it’s going bankrupt.

The "Digital Photonics" strategy is the real deal, the deleveraging is happening now, as I try to show it in my valuation model.

Positions: Long $AMS.SW / $AMSSY. I invested 1000€ in stocks OTC at and 500€ in leveraged calls. Let’s get these photonics tendies. Get yourself a bit of Euro exposure. Be early in the re-rating. These guys are already delivering... https://ams-osram.com/news/press-releases/microLED

Disclaimer: Not financial advice, wish it were though.