Arteris (AIP) is the merchant leader in network-on-chip interconnect intellectual property, the data-movement layer inside AI-era systems-on-chip and chiplets, as it benefits from demand for complex chip designs from AI, high-performance computing and automotive customers, Oppenheimer said in a note Thursday.
The brokerage said its thesis is based on AI-driven demand for interconnect IP sustaining licensing growth and share gains from in-house network-on-chip IP. It also expects royalty revenue growth to accelerate as customers move from chip design to mass production.
Oppenheimer said high operating leverage and financial visibility support a profit inflection, while switching costs and ecosystem neutrality help protect Arteris' market position.
Annual contract value, a leading indicator of licensing revenue, grew 27% to $77 million in 2025. Remaining performance obligations, another leading indicator, increased 32% to $116.8 million at year-end 2025. Oppenheimer said the metrics provide nearly 80% visibility into 2026 licensing revenue.
The commercial NoC interconnect IP market is effectively a duopoly between Arteris and Arm Holdings (ARM), the brokerage added.
Oppenheimer initiated coverage of the stock with an outperform rating and a $40 price target.
Shares of Arteris were down 5.7% in Thursday afternoon trading.
Price: 30.83, Change: -1.85, Percent Change: -5.66
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