Insider: chief buys tech stake and £5m spent on FTSE 100 stock

Raspberry Pi Holdings (LSE:RPI) chief executive and founder Eben Upton has reacted to the company’s slide in valuation by picking up shares for the first time since its flotation 16 months ago.

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Upton’s £20,000 investment took place on Wednesday with shares trading near their low for the year at 342.9p, having more than halved from January’s peak of 766p.

He made his move four months after offloading 14% of his shareholding, raising £1.8 million at a price of 454.5p following the expiry of lock-up arrangements in the June 2024 IPO.

The shares ended last week at 340.6p, which is still higher than the starting price of 280p when the maker of high-performance, low-cost general-purpose computing platforms joined the stock market in an oversubscribed flotation.

Cambridge-based Raspberry Pi began trading in 2012 and has now sold 70 million units to industrial customers, enthusiasts and educators in markets worldwide.

The company’s valuation topped £1 billion at the start of this year, driven by a pipeline of opportunities among industrial-focused original equipment manufacturers (OEM).

The initial share price momentum also reflected the company's AI positioning through its suite of add-on products, as well as strong growth in the semiconductor market.

Sales of Raspberry Pi’s microcontrollers rose 105% to 4.5 million units in the first half of this year, meaning semiconductor volumes were larger than board units for the first time.

Upton said recently: “We are encouraged by the uptake of new products, expanding OEM engagement, and the first instance of semiconductor volumes exceeding board volumes.”

Product launches in the current half year include a major release targeting the enthusiast and education market, a next-generation AI accessory designed to support generative workloads and a cost-engineered compute module product targeting the China domestic market.

However, sentiment has been impacted by the recent rapid rise in spot prices for the dynamic random-access memory (DRAM) used in single board computers and compute modules.

Raspberry Pi said in September’s interim results that it had sufficient DRAM supply to support its full-year goals, adding that if elevated pricing persisted it held several strategic options.

Overall unit sales were flat compared to the strong first half of 2024, but increased 9% sequentially in the second half of the year. It reiterated annual profit expectations.

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Broker Peel Hunt said: “We believe Raspberry Pi is making great strategic progress in becoming an Edge AI platform – a big positive for the medium term.”

Based on a top-quartile peer multiple of 26.7 times 2026 earnings, the City firm has a target price of 460p and Add recommendation.

However, Deutsche Bank recently cut its price target to 380p, noting that Raspberry Pi faced the first major test of its company ethos.

It said management had to decide whether to "profit maximise" or swallow the spike in DRAM memory costs in the hope that on-hand inventory will allow it to ride out conditions until the next memory downcycle.

Buying on weakness

A £5 million stake in Hikma Pharmaceuticals (LSE:HIK) has been bought by one of the company’s senior directors after shares slumped to their lowest level in almost three years.

Executive vice chair Mazen Darwazah, who is a member of the company’s founding family, boosted his personal stake after a negative City reaction to new medium-term guidance.

FTSE 100-listed Hikma slid more than 10% after it said that the margin in its most profitable division of injectables will be impacted by delays to the ramp-up of a new manufacturing site in Ohio and increased R&D spending.

Hikma also expects compound revenues growth in 2024-27 at the lower end of its 6-8% guidance range, with core operating profit 5%-7% higher rather than 7%-9% previously hoped.

Chief executive Riad Mishlawi reiterated 2025 expectations and said the significant expansion of Hikma’s manufacturing capacity will enable the company to meet growing demand and accelerate the delivery of increasingly complex products.

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The shares closed on Friday at 1,582p, which compares with Berenberg’s lower price target of 2,300p.

The City firm said following the update: “While disappointing, we think that many of the key drivers for the business remain intact, albeit they have been pushed slightly further out.”

Peel Hunt placed its Buy recommendation and 2,175p target price under review. However, the broker added: “We believe there is a lot to like in this agile and productive business, and ultimately investing more in R&D is the right strategy.”

The purchase by Darwazah, who joined Hikma in 1985 and is responsible for the business across the MENA region, bought his shares on Thursday at a price of 1,601p. Senior independent director Victoria Hull also spent £50,000 on shares at a price of 1,547p on Friday.