Adeia Inc. (ADEA): A Bull Case Theory

We came across a bullish thesis on Adeia Inc. on TradersPro’s Substack. In this article, we will summarize the bulls’ thesis on ADEA. Adeia Inc.'s share was trading at $19.01 as of February 20th. ADEA’s trailing and forward P/E were 23.41 and 11.39 respectively according to Yahoo Finance.

Adeia Inc. (ADEA) is an intellectual property licensing company uniquely positioned to benefit from the structural growth of streaming, connected devices, and advanced semiconductor technologies. The company does not manufacture products but instead generates recurring revenue by licensing its patents, which underpin innovations in video streaming, smart TVs, digital content discovery, and advanced semiconductor packaging.

These foundational technologies are increasingly critical as content consumption shifts to over-the-top platforms and smart devices, driving long-term demand for Adeia’s portfolio. The company’s patents also capture value from rising semiconductor complexity, particularly in advanced packaging and heterogeneous integration, areas essential for next-generation chip performance.

As digital transformation accelerates across media, entertainment, and technology sectors, companies investing in streaming infrastructure, AI-enhanced content personalization, and advanced chip architectures rely heavily on licensed intellectual property, creating a favorable structural backdrop for Adeia’s licensing growth. The combination of recurring licensing revenue and exposure to secular technology trends provides a durable, high-margin business model with strong long-term upside potential.

Technically, the stock has recently confirmed buyer conviction, with increased volume pushing the price into a momentum zone, suggesting institutional demand is building. This confluence of structural growth, recurring cash flows, and positive technical signals positions Adeia as a compelling investment opportunity, offering both near-term market recognition and long-term value creation driven by its patent portfolio, which remains central to the evolution of digital media and semiconductor industries. Investors stand to benefit from a company that leverages innovation without the risks of manufacturing, while secular shifts in content consumption and chip complexity provide a persistent catalyst for licensing revenue expansion.

Previously, we covered a bullish thesis on Okta, Inc. (OKTA) by Antonio Linares in December 2024, which highlighted its leadership in cloud identity management, AI-driven growth potential, and improving profitability. OKTA’s stock price has depreciated by 9.05% since our coverage. TradersPro shares a similar view but emphasizes Adeia Inc. (ADEA)’s recurring licensing revenue and structural growth in streaming, connected devices, and semiconductors.

Adeia Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held ADEA at the end of the third quarter which was 20 in the previous quarter. While we acknowledge the risk and potential of ADEA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADEA and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.