Allegro MicroSystems (ALGM) has pushed deeper into robotics hardware by rolling out new precision sensing and 48V power management chips aimed at physical AI systems used in humanoids and collaborative industrial robots.

Recent trading has been choppy for Allegro MicroSystems, with the share price at $31.69 after declining 8.17% over the last day and 31.15% over the past 90 days. This comes even though the year-to-date share price return is up 17.76% and the 3-year total shareholder return sits at 14.45%, which points to longer-term gains but fading short-term momentum as investors reassess growth expectations and risk around new product launches such as the robotics-focused 48V portfolio.

Scan Allegro MicroSystems’ move into physical AI alongside a curated field of peers shaping robotics hardware through the 55 AI infrastructure stocks.

Allegro MicroSystems now trades at a double discount, both to analyst targets and to one intrinsic value estimate, after a sharp pullback. Is the market rightly wary of execution risk in robotics, or mispricing that caution?

Most Popular Narrative: 40% Undervalued

Allegro MicroSystems’ most followed valuation view pegs fair value at $52.62, well above the last close at $31.69. This puts a lot of weight on how the business handles growth, margins and cash generation over the next few years.

Ongoing investments and recent improvements in Allegro MicroSystems’ manufacturing and cost structure, including gross margin of 51.1% in first quarter fiscal 2027 versus 48.2% a year earlier, continued factory efficiency work, bill of material transitions such as gold to copper wire bonding and selective price actions expected to be more impactful in the back half of fiscal 2027, give the company tangible levers to pursue its stated target of 55% gross margin and beyond. This would directly support higher operating margin and earnings per share.

See why 23 investors see Allegro MicroSystems as 40% undervalued.

That narrative leans heavily on a discount rate of 11.45%, earnings forecasts that rise to $352.6 million by around 2029, and an implied P/E of 39.3x on those future profits to arrive at the $52.62 fair value figure.

At the current $31.69 share price, that framework suggests investors are paying a lower price than this earnings and margin path would justify if it plays out as outlined.

Result: Fair Value of $52.62 (UNDERVALUED)

Still, if Allegro MicroSystems sees China auto and data center demand cool, or if pricing and cost pressures squeeze margins, that would support the bear case on today’s discount.