GSIT Climbs 62% Year to Date: Should You Buy the Stock?

GSI Technology, Inc. GSIT shares have surged 62% year to date, outpacing the industry’s 51.7% growth. The company has outperformed other industry players, including Pure Storage, Inc. PSTG and NetApp, Inc. NTAP, which posted increases of 41.4% and 2.3%, respectively, in the same time frame. GSIT benefits from rising AI-driven SRAM demand, defense sector traction, Gemini-II advancements, strong liquidity, and a diversified end-market strategy.

A Key Look Into GSIT’s Business Operations

GSI Technology, headquartered in California, develops in-place associative computing solutions for high-growth AI and HPC markets, including NLP and computer vision, using its Gemini APU products. These APUs are optimized for similarity search and Boolean processing, offering low-latency, low-power performance ideal for edge computing, SAR image processing, and real-time applications. The company also maintains leadership in high-speed SRAM markets, serving telecom, military and aerospace sectors with radiation-tolerant products. GSIT follows a fabless model, leveraging TSMC for manufacturing. It continues to expand its SaaS offerings, pursue strategic partnerships, and explore monetization avenues, including licensing and potential M&A.

GSI Technology’s Key Tailwinds

GSI Technology is seeing strong momentum in its SRAM chip business, driven by the rapid expansion of artificial intelligence workloads. As enterprises scale up their use of generative AI and large model training, the demand for high-performance memory like SRAM is rising. This has led to three consecutive quarters of growth in SRAM sales, supported by orders from key players like KYEC and Cadence Design Systems. 

The company reached a major milestone with the successful evaluation and functionality of its Gemini-II chip, which, alongside the Leda-2 board, was shipped to an offshore defense contractor for proof-of-concept work. These developments are critical as GSIT targets high-growth sectors such as satellite communications and edge computing. 

To support its next phase of growth, GSIT is investing in the expansion of its software and applications team. This effort is aimed at enabling robust customer development for Gemini-II and laying the foundation for the company’s long-term product roadmap. 

Financially, GSI Technology has strengthened its position by raising $11 million through its at-the-market program, ending the first-quarter fiscal 2026 with $22.7 million in cash. This liquidity gives the company operational flexibility and the ability to fund strategic initiatives. Working capital stood at $25.7 million, and stockholders’ equity reached $37.4 million. These figures suggest a strong balance sheet that can support ongoing R&D, customer acquisition, and possible strategic investments. The company also continues to evaluate long-term options to enhance shareholder value.

Finally, GSIT’s diversification across end markets serves as a key tailwind. The company is gaining traction in the defense sector, which represented 19.1% of first-quarter shipments. Gemini-II’s compatibility with a broad set of AI workloads, from YOLO-based vision algorithms to large-scale LLMs, makes it suitable for both government and private sector applications.

Challenges Persist for GSIT’s Business

GSI Technology faces significant challenges, including unpredictable demand from major customers like KYEC, Nokia and Cadence, global economic uncertainty due to inflation, trade restrictions, and geopolitical tensions, particularly in Israel and Taiwan. The company is navigating a strategic shift from legacy SRAM products to new in-place associative computing offerings, which require heavy R&D investment and market adoption. Supply chain pressures, reliance on single-source suppliers, and risks from military conflicts also pose substantial operational and financial threats

GSI Technology’s Valuation

From a valuation perspective, GSI Technology appears relatively expensive. Currently, GSIT is trading at 5.43X trailing 12-month EV/sales value, below the industry’s average of 2.52X. The metric also remains higher than one of the company’s peers, Pure Storage (8.06X), but remains lower than that of NetApp (3.47X).

Conclusion

GSI Technology’s expanding SRAM chip business and the strategic advancement of the Gemini-II platform into high-growth markets such as defense, AI, and edge computing reinforce the company's strong growth prospects. A robust balance sheet and renewed investment in software capabilities present additional tailwinds. However, investors should remain cautious of potential headwinds such as customer concentration risks, geopolitical instability and the execution challenges tied to transitioning into a new technology paradigm. Also, its valuation is higher than the industry average. For long-term investors, GSIT’s strong fundamentals may justify holding the stock, but investors looking to add the stock to their portfolios may want to wait for a better entry point. 

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This article originally published on Zacks Investment Research (zacks.com).

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