AIP · Arteris
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $17.50
Note written ·
How this view changed
- · Rated Medium. Results, 5 November 2026: Arteris reported Q3 2026 revenue of $25.8M (+48% YoY), raised full-year revenue guidance to $98.5-99.5M from $95-98M and guided Q4 revenue of $25.7-26.7M.
Price against the kill line
10.5% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $17.50, on record since 10 November 2026. The shares are down 30.5% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $17.50, under the 6 November 2026 close of $17.80, which would show the shares giving back the post-report recovery. Fourth-quarter revenue below the $25.7 million low end of the guide, or a cut to the $98.5–99.5 million full-year range, would also show the case failing.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 25.8
- Revenue, change on a year (%)
- +48.1
- Gross margin (%)
- 86.6
- Operating margin (%)
- −43.9
- Free cash flow, four quarters ($M)
- 2.2
- Free-cash-flow yield (%)
- 0.2
All filed numbers
What Arteris reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 25.8 | +48.1 | 86.6 | −43.9 |
| first filed | 24.1 | +46.2 | 85.1 | −57.6 |
| first filed | 22.9 | +38.7 | 85.8 | −40.5 |
| first filed | 20.1 | +30.0 | 90.8 | −42.0 |
| first filed | 17.4 | +18.3 | 89.9 | −50.1 |
| first filed | 16.5 | +13.2 | 89.4 | −50.0 |
| Pre-tax income ($M) | −10.3 |
| Net income ($M) four quarters: −41.7 | −11.2 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +15.5 |
| Operating cash flow ($M) | 3.6 |
| Capital spending ($M) | 1.4 |
| Free cash flow ($M) | 2.2 |
| Cash and short-term investments ($M) | 71.0 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) +30.5% on a year | 112 |
| Backlog, orders not yet delivered ($M) +29.9% on a year | 131 |
| Receivables ($M) | 21.0 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 65.9 |
| Market value ($M) | 962 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 14.6 |
| Free-cash-flow yield (%) | 0.2 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.6% of shares outstanding sold short, 4.5 days of average trading to cover, −0.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $8.0M |
| 12 monthsfrom | $0 | $80.6M |
The thesis
Arteris, which licenses the design blocks that carry data between the parts of a chip, is modestly more likely than not to beat the S&P 500 over the next three months. The company raised its 2026 revenue guidance to $98.5–99.5 million on 5 November 2026, and the shares have recovered from that day's $15.93 close to $20.19 on 12 November 2026. The fourth-quarter report, expected around 12 February 2027, tests whether revenue confirms the raised guide.
On 5 November 2026 Arteris reported third-quarter revenue of $25.8 million, up 48% from a year earlier, and a non-GAAP operating loss of $1.2 million (Form 8-K exhibit 99.1). Company news put revenue at $25.774 million against an analyst estimate of $24.503 million. The 10-Q quarterly filing was also filed with the SEC on 5 November 2026.
The price already reflects a deep discount: the $20.19 close is 59.8% below the 52-week intraday high of $50.26 on 30 June 2026, and the shares are down 28.7% over three months. Jefferies' price target of $40 and Oppenheimer's of $30, both set after the report, sit well above the close.
Bullish and bearish views on Arteris, Inc.
The bull case on Arteris, Inc. (AIP), in brief: third quarter beat and guidance rose. The bear case: analysts cut targets after a good report.
Bull case
- Third quarter beat and guidance rose. Revenue of $25.8 million rose 48% from a year earlier, and the non-GAAP operating loss of $1.2 million was reported on 5 November 2026. Company news lists adjusted earnings of negative $0.02 per share against a negative $0.04 estimate.
- Full-year range raised again. Guidance for 2026 revenue moved to $98.5–99.5 million from $95–98 million on 5 November 2026. Company news lists the prior consensus at $96.701 million.
- Fourth-quarter guide includes breakeven. Arteris guided fourth-quarter revenue to $25.7–26.7 million, with a non-GAAP operating result between a $0.9 million loss and $1.1 million income (5 November 2026 release).
- Royalties and backlog are growing. Trailing-twelve-month variable royalties were $9.4 million, up 71% from a year earlier. Annual contract value plus royalties reached $103.8 million, up 39%, and remaining performance obligations were $135.5 million, up 29% (Form 8-K exhibit 99.1, 5 November 2026).
- Targets remain far above the price. Jefferies kept its Buy rating with a $40 target on 7 November 2026, and Oppenheimer kept a Buy-equivalent rating with a $30 target, per Investing.com on 6 November 2026.
Bear case
- Analysts cut targets after a good report. Jefferies lowered its target to $40 from $50 on 7 November 2026, and Oppenheimer moved to $30 from $40, per Investing.com on 6 November 2026. Each cut kept the rating but lowered the value attached to it.
- Shares sit under both moving averages. The $20.19 close on 12 November 2026 is below the 50-day average of $21.26 and the 200-day average of $25.14, both adjusted daily closes. The shares closed at $28.32 on 14 August 2026.
- Insiders and large holders keep selling. Charles Janac, the chief executive, and Bayview Legacy, LLC, each a 10% owner, sold 100,000 shares at an average $18.22 on 2 November 2026 under Rule 10b5-1 plans, a pre-arranged selling schedule (SEC Form 4, filed 4 November 2026). Paul Alpern, the general counsel, sold 4,000 shares at $19.65 on 10 November 2026 under a similar plan.
- GAAP losses remain large. The third-quarter GAAP net loss was $11.2 million, or $0.23 per share, against a non-GAAP loss of $0.02 per share (5 November 2026 release).
- Royalties lag design wins. Royalties follow design wins by roughly 18–24 months, so the 71% royalty growth reflects earlier bookings and not current chip demand.
Price setup
The shares closed at $15.93 on 5 November 2026, $17.80 on 6 November 2026, $19.20 on 9 November 2026, $19.09 on 10 November 2026, $20.32 on 11 November 2026 and $20.19 on 12 November 2026. The 52-week closing low is $12.63 on 20 November 2025.
The last close is $1.07 below the 50-day average of $21.26 and $4.95 below the 200-day average of $25.14. A close above the 50-day average would put the shares back over the level they traded around in the weeks before the report; the 200-day average is the next resistance.
The shares rose after a clear beat but have not recovered the August level, so selling pressure has outweighed the improvement in results. Closes of 6 November 2026 and later all sit above the $17.50 kill line.
Catalysts ahead
- ~12 February 2027 (est.): Fourth-quarter and full-year 2026 results. Tests the $25.7–26.7 million fourth-quarter revenue guide, the first guided operating breakeven and the $98.5–99.5 million full-year range.
What would change the view
A daily close below $17.50, under the 6 November 2026 close of $17.80, which would show the shares giving back the post-report recovery. Fourth-quarter revenue below the $25.7 million low end of the guide, or a cut to the $98.5–99.5 million full-year range, would also show the case failing.
The risks this note tracks, each with what would confirm it:
- Selling pressure keeps the shares falling despite the beat-and-raise, or a weak chip-stock market drags them lower. Confirmed by: further declines in the shares with no company announcement, while high-beta chip names also fall.
- Analysts keep cutting targets after the report, as Jefferies and Oppenheimer did on 6 November 2026 and 7 November 2026. Confirmed by: further target reductions or rating downgrades from the seven covering firms.
- Insider and large-holder selling keeps supply above the shares. Confirmed by: new SEC Form 4 filings showing sales by executives, directors or 10% owners after the 10 November 2026 sale by the general counsel.
- Royalty growth slows because royalties follow design wins by roughly 18–24 months. Confirmed by: trailing-twelve-month variable royalties growing materially slower than the 71% reported on 5 November 2026.
- Fourth-quarter revenue or operating result misses the guided range. Confirmed by: fourth-quarter revenue below $25.7 million or a non-GAAP operating loss wider than $0.9 million.
What it trades with
Arteris sells network-on-chip interconnect intellectual property to chip designers and has no commodity or materials exposure. Its revenue follows semiconductor design activity, including chiplet and AI-accelerator projects. The shares have moved with high-beta chip and small-cap growth names over the autumn decline.
Company news on 27 October 2026 reported Tenstorrent, an AI-chip designer, expanding its deployment of Arteris IP, which illustrates the customer base.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $25.8 million, up 48% from a year earlier; non-GAAP operating loss was $1.2 million; GAAP net loss was $11.2 million, or $0.23 per share. Arteris third-quarter 2026 results release, Form 8-K exhibit 99.1 · as of
- Full-year 2026 revenue guidance was raised to $98.5–99.5 million from $95–98 million; fourth-quarter revenue was guided to $25.7–26.7 million. Arteris third-quarter 2026 results release, Form 8-K exhibit 99.1 · as of
- Trailing-twelve-month variable royalties were $9.4 million, up 71% from a year earlier; annual contract value plus royalties were $103.8 million, up 39%; remaining performance obligations were $135.5 million, up 29%. Arteris third-quarter 2026 results release, Form 8-K exhibit 99.1 · as of
- Adjusted earnings of negative $0.02 per share beat a negative $0.04 estimate; revenue of $25.774 million beat a $24.503 million estimate; the full-year guide compared with a $96.701 million consensus. Company news headlines, 5 November 2026 · as of
- Jefferies maintained its Buy rating and lowered its price target to $40 from $50. Company news, 7 November 2026 · as of
- Oppenheimer kept a Buy-equivalent rating and moved its price target to $30 from $40. Investing.com analyst table, 6 November 2026 · as of
- Charles Janac (chief executive, 10% owner) and Bayview Legacy, LLC (10% owner) each sold 100,000 shares at an average $18.22 on 2 November 2026 under Rule 10b5-1 plans. SEC Form 4 filings, 4 November 2026 · as of
- Paul Alpern, vice president and general counsel, exercised 4,000 options at $0.56 and sold 4,000 shares at $19.65 on 10 November 2026 under a Rule 10b5-1 plan. SEC Form 4 filing, 12 November 2026 · as of
Sources
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