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GSI Technology (GSIT)
NASDAQ:GSIT
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GSI Technology
(NASDAQ:GSIT)
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Rating:52Neutral
Price Target:
$8.00
▲(32.01% Upside)
The score is primarily constrained by weak financial performance, with large losses and negative operating/free cash flow despite decent gross margins and some revenue growth. Technicals are moderately supportive with price above key moving averages and positive MACD, while valuation is limited by a negative P/E and no dividend support. The earnings call was mixed: constructive product and funding/roadmap progress and steady guidance, but heavy spending, widening operating losses, cash burn, and customer variability increase execution risk.
Positive Factors
Technology Validation
The validation by Cornell University positions GSI's technology as a competitive alternative in AI, enhancing its market credibility and potential for future growth.
Successful Financing
The $50 million financing provides GSI with capital to accelerate development of its Gemini-II and Plato initiatives, supporting long-term growth and innovation.
Revenue Growth
The revenue growth indicates increasing demand for GSI's products, suggesting a strengthening market position and potential for sustained financial improvement.
Negative Factors
Operating Loss
Despite improvements, ongoing operating losses highlight challenges in achieving profitability, which could hinder long-term financial stability.
Decreased Military Defense Sales
The decline in military defense sales may impact revenue stability, as this sector is a key market for GSI's products, potentially affecting future growth.
Negative Cash Flow
Negative cash flow indicates difficulty in sustaining operations and funding growth internally, posing a risk to long-term viability and strategic initiatives.
GSI Technology (GSIT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$229.60M
Dividend YieldN/A
Average Volume (3M)2.17M
Price to Earnings (P/E)―
Beta (1Y)3.13
Revenue Growth22.00%
EPS Growth28.06%
CountryUS
Employees148
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)-0.09
Shares Outstanding35,241,703
10 Day Avg. Volume1,453,224
30 Day Avg. Volume2,169,094
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)1.84
Price to Sales (P/S)2.53
P/FCF Ratio-3.98
Enterprise Value/Market Cap0.47
Enterprise Value/Revenue4.47
Enterprise Value/Gross Profit8.01
Enterprise Value/Ebitda-9.69
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
GSI Technology Business Overview & Revenue Model
Company DescriptionGSI Technology, Inc., a fabless semiconductor company, designs, develops, and markets semiconductor memory solutions to networking, industrial, medical, aerospace, and military customers in the United States, China, Singapore, Germany, the Netherlands, and internationally. The company's associative processing unit products offers applications using similarity search in visual search queries for ecommerce, computer vision, drug discovery, cyber security, and service markets. In addition, it offers static random access memory (SRAM) products, such as SyncBurst for microprocessor cache and other applications; No Bus Turnaround SRAMs to address the needs of networking and telecom applications; SigmaQuad and SigmaDDR products for density and random transaction rate requirements of networking and telecom applications; Low Latency DRAMs a solution for advanced data networking applications; Asynchronous, a main memory for small cache-less embedded processors for industrial electronics, measurement systems and cost-sensitive networking equipment, and other applications; and specialty SRAMs. The company also provide radiation-hardened and radiation-tolerant SRAMs for aerospace and military applications, such as networking satellites and missiles. Its products are used as components in our OEM customers' products, including routers, switches and other networking and telecommunications products; military and aerospace applications, such as radar and guidance systems and satellites; audio/video processing; test and measurement applications consisting of high-speed testers; and automotive applications, such as smart cruise control; and medical applications, including ultrasound and CAT scan equipment. The company markets its products through a network of independent sales representatives and distributors. GSI Technology, Inc. was incorporated in 1995 and is headquartered in Sunnyvale, California.
How the Company Makes MoneyGSI Technology generates revenue primarily through the sale of its SRAM products to original equipment manufacturers (OEMs) and other customers in the telecommunications and networking sectors. The company's revenue model is based on direct sales of its memory products, which are often sold as components in larger electronic systems. Key revenue streams include bulk sales of memory chips, custom memory solutions tailored to specific customer needs, and ongoing contracts with major clients in the telecommunications and defense sectors. Additionally, GSI Technology may benefit from strategic partnerships with technology firms and manufacturers that require specialized memory solutions, further enhancing its market presence and revenue generation capabilities.
GSI Technology Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Neutral
The call presented a mix of encouraging strategic and technological progress (revenue growth YoY, strong balance sheet from financing, a promising Gemini II TTFT benchmark, a government-backed POC with >$1M in funding, and early customer gains such as Nokia) alongside meaningful near-term financial and execution challenges (sharp rise in R&D and operating expenses, wider operating loss, gross margin compression, elevated cash burn from operations, and variability in customer revenues such as a notable Cadence decline). The company appears to be investing heavily in product development and pursuing government-funded proof-of-concept opportunities while relying on financing to support operations; positives around product performance and cash resources are balanced by execution and profitability risks.Q3-2026 Updates
Positive Updates
Revenue Growth Year-over-Year and Fiscal YTD
Net revenues of $6.1 million in Q3 FY2026, a 12% increase year-over-year (from $5.4M) and a 28.5% increase on a fiscal year-to-date basis.
Gemini II Benchmark and Edge AI Advantage
Preliminary TTFT benchmark: three-second time to first token for a multimodal (text + video) workload at ~30 watts system power; up to 3x faster first-token performance and lower power versus a competitive platform, supporting low-power, low-latency edge AI use cases.
Strategic Partnership and Non-Dilutive Government Funding
Signed agreement with G2 Tech for Sentinel POC (autonomous perimeter security). Expecting >$1 million in government funding to be recorded as an offset to R&D expenses for the project, and potential pathway to design wins if the government evaluation succeeds.
PLATO Hardware Development and IP Investment
Purchased required IP and commenced PLATO hardware development; added contract engineers to support hardware design with target operations in early 2027, demonstrating clear R&D progress and roadmap commitment.
Improved Cash and Balance Sheet Position
Cash and cash equivalents increased to $70.7 million as of December 31, 2025 (from $25.3M on Sept 30, 2025 and $13.4M as of March 31, 2025), primarily driven by $46.9M net proceeds from an October 2025 registered direct offering; working capital $71.7M and stockholders' equity $83.6M.
Customer Mix Wins — Notable Nokia Increase
Sales to Nokia rose to $675,000 (11.1% of net revenues) from $239,000 (4.4% of net revenues) a year ago, indicating growing traction with this customer (+~182% YoY in dollar terms).
Guidance for Q4 FY2026
Company provided Q4 guidance of net revenues between $5.7M and $6.5M and gross margin expected approximately 54%–56%, indicating modest near-term visibility.
Negative Updates
Rising Operating Expenses and Heavy R&D Spend
Total operating expenses of $10.1M in Q3 FY2026 versus $7.0M a year ago and $6.7M in the prior quarter. R&D expense increased to $7.5M from $4.0M a year ago (+87.5% YoY) and from $3.8M in the prior quarter (+97.4% QoQ), driven by IP purchase and consulting for PLATO.
Worsening Operating Loss
Operating loss widened to $6.9M in Q3 FY2026 compared to an operating loss of $4.1M in the prior-year period and $3.2M in the prior quarter, reflecting higher spending that outpaced revenue growth.
Gross Margin Compression
Gross margin decreased to 52.7% in Q3 FY2026 from 54.0% in the comparable prior-year quarter and 54.8% in the prior quarter, primarily due to product mix — a negative trend for profitability.
Net Loss Dynamics Influenced by Non-Cash Items
Reported net loss was $3.0M (−$0.09 per diluted share), an improvement versus prior-year net loss of $4.0M (−$0.16 per share), but the improvement was materially affected by a $3.6M interest and other income figure that included a $6.2M non-cash fair value adjustment on prefunded warrants and one-time issuance costs, masking operational losses.
Cash Used by Operations and Increased Cash Burn
Net cash used in operating activities was $7.9M for the quarter, indicating elevated cash burn tied to Gemini II and PLATO development despite a strong financing-driven cash balance.
Customer Concentration Shifts and Large Customer Declines
Sales to Cadence declined materially to $233,000 (3.8% of net revenues) from $971,000 (17.9% of net revenues) a year ago and $1.4M (21.6% of net revenues) in the prior quarter, highlighting variability and potential concentration risk in customer demand.
Reliance on Financing and Government Funding for Near-Term Resources
Significant cash build was driven by a registered direct offering; progress depends on converting POCs and securing government awards (e.g., SBIR/BAA), which are beneficial but uncertain and take time to convert into stable revenue.
Company Guidance
Guidance for fiscal Q4 2026 calls for net revenues of $5.7 million to $6.5 million with a gross margin of approximately 54%–56%. For context, management reported Q3 FY2026 net revenues of $6.1 million (up 12% year‑over‑year and up 28.5% fiscal year‑to‑date), a Q3 gross margin of 52.7% (vs. 54.0% a year ago), operating expenses of $10.1 million (R&D $7.5M, SG&A $2.6M), an operating loss of $6.9M, and a net loss of $3.0M or $0.09 per diluted share; cash and cash equivalents were $70.7M as of December 31, 2025 (beginning cash Sept. 30 $25.3M), working capital $71.7M, and stockholders’ equity $83.6M. Additional operational metrics highlighted include expected >$1M in government funding for the Sentinel POC (to offset R&D), Gemini II preliminary TTFT of three seconds at ~30 watts (up to 3x faster than a competitor), and plans to begin PLATO hardware development toward operations in early 2027.GSI Technology Financial Statement Overview
Summary
Revenue is growing (8.56% TTM) and gross margin is solid (55.80%), but profitability is weak with negative EBIT and net margins (net margin -48.54%). Cash generation is a key issue with negative operating and free cash flow and declining free cash flow growth (-24.67% TTM). Balance sheet leverage appears manageable with low debt-to-equity, but returns are negative (negative ROE).Income Statement
GSI Technology's income statement shows a mixed performance. The company has managed to achieve a revenue growth rate of 8.56% in the TTM period, indicating some positive momentum. However, the company is struggling with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin is relatively healthy at 55.80%, but the negative net profit margin of -48.54% highlights significant challenges in controlling costs and achieving profitability.45
Neutral
Balance Sheet
The balance sheet of GSI Technology reflects a moderate financial position. The debt-to-equity ratio is low, indicating limited reliance on debt financing, which is a positive sign. However, the return on equity is negative, suggesting that the company is not generating sufficient returns on shareholders' equity. The equity ratio is not explicitly calculated, but the overall leverage appears manageable.50
Neutral
Cash Flow
The cash flow statement reveals significant challenges for GSI Technology. The company has negative operating and free cash flows, with a concerning free cash flow growth rate of -24.67% in the TTM period. The operating cash flow to net income ratio is negative, indicating that the company is not generating cash from its operations to cover its net losses. The free cash flow to net income ratio is slightly above 1, suggesting that free cash flow is in line with net income, but both are negative.40
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.02M | 20.52M | 21.77M | 29.69M | 33.38M | 27.73M |
| Gross Profit | 13.41M | 10.14M | 11.82M | 17.68M | 18.54M | 13.22M |
| EBITDA | -11.08M | -15.96M | -19.50M | -16.70M | -15.04M | -20.05M |
| Net Income | -11.66M | -10.64M | -20.09M | -15.98M | -16.37M | -21.50M |
Balance Sheet | ||||||
| Total Assets | 51.99M | 43.32M | 42.48M | 60.03M | 76.42M | 76.42M |
| Cash, Cash Equivalents and Short-Term Investments | 25.33M | 13.43M | 14.43M | 30.57M | 43.96M | 43.96M |
| Total Debt | 9.06M | 9.64M | 1.52M | 651.00K | 898.00K | 898.00K |
| Total Liabilities | 13.44M | 15.09M | 6.50M | 8.66M | 11.97M | 11.97M |
| Stockholders Equity | 38.55M | 28.23M | 35.97M | 51.37M | 64.45M | 64.45M |
Cash Flow | ||||||
| Free Cash Flow | -7.88M | -13.02M | -18.00M | -17.16M | -14.60M | -15.46M |
| Operating Cash Flow | -7.83M | -12.97M | -17.35M | -16.84M | -13.83M | -15.25M |
| Investing Cash Flow | 9.00K | 11.35M | 2.76M | 6.68M | 4.20M | 3.29M |
| Financing Cash Flow | 14.79M | 633.00K | 1.81M | 402.00K | 2.37M | 4.69M |
GSI Technology Technical Analysis
Negative
6.06
Price Trends
6.90
Negative
6.83
Negative
5.18
Positive
Market Momentum
-0.07
Positive
38.95
Neutral
20.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GSIT, the sentiment is Negative. The current price of 6.06 is below the 20-day moving average (MA) of 7.61, below the 50-day MA of 6.90, and above the 200-day MA of 5.18, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 38.95 is Neutral, neither overbought nor oversold. The STOCH value of 20.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GSIT.
GSI Technology Risk Analysis
GSI Technology disclosed 44 risk factors in its most recent earnings report. GSI Technology reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
GSI Technology Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $240.22M | -398.80 | -0.91% | ― | -0.41% | -134.49% | |
54 Neutral | $78.89M | -3.43 | -116.86% | ― | -94.26% | 3.20% | |
52 Neutral | $229.60M | -16.74 | -18.76% | ― | 22.00% | 28.06% | |
50 Neutral | $102.91M | -2.70 | -8.46% | ― | -7.79% | 10.04% | |
49 Neutral | $38.01M | -1.27 | ― | ― | -38.72% | 16.01% | |
44 Neutral | $445.35M | ― | -349.80% | ― | ― | ― |
* Technology Sector Average
GSIT
GSI Technology
6.10
2.95
93.65%
WOLF
Wolfspeed Inc
15.53
-13.07
-45.70%
MX
MagnaChip
2.80
-1.69
-37.64%
PXLW
Pixelworks
6.00
-4.28
-41.63%
ATOM
Atomera
2.32
-7.54
-76.47%
MRAM
Everspin Technologies
9.97
4.17
71.90%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.