Anyone holding Raspberry Pi (LSE:RPI) shares have enjoyed some sweet and juicy gains recently. In just three months, this FTSE 250 tech stock is up by an astonishing 202%. This is enough to have turned a £7,500 investment into almost £23,000!
Should I snap up some shares at 876p in case this fascinating UK tech stock heads even higher?
Multiplying use cases
Raspberry PI designs high-performance single board computers, modules and semiconductors. While it started in the education and hobbyist markets, the company has broadened its customer base significantly, with around 75% of units now sold to OEMs (original equipment manufacturers).
Commercial and industrial applications include smart vending machines, smart home appliances, factory automation, and medical monitoring systems. Obviously, this represents a much larger opportunity because large OEMs commit to buying in bulk, often over multiple years.
Ironically though, it was a hobbyist trend back in February that kicked off the stock’s meteoric rise. Viral videos showed how people were using Raspberry Pi’s boards to run autonomous AI agent OpenClaw.
The excitement reached fever pitch in June when the company released a strong trading update. This said profitability was “materially ahead” of expectations as it benefitted from strong pricing and industrial demand.
For the six months ending 30 June, the firm expects adjusted EBITDA of at least $38m. For context, the market was expecting EBITDA of $42m for the whole year, so this was a significant upgrade to the outlook.
This news sent the stock surging to a record high of 1,051p.
A future agentic AI leader?
Now, this is a stock where I see enormous long-term potential in Edge AI compute (ie AI that runs directly on a device instead of in the cloud). Just consider the following quote from management in March:
We have the opportunity to become the default embedded host for Agentic AI. We’re already seeing this in the popularity of agentic platforms like OpenClaw running on Raspberry Pi. Together, these give us the opportunity to define the future direction of AI as inference migrates to the edge over the next decade.
CEO Eben Upton.
The company notes that what its enthusiast customer base is doing today with agentic AI, its industrial customers will follow in a few years’ time.
If Raspberry Pi can become the default embedded host for agentic AI, then this will surely be a much larger company in a decade’s time. After all, its market-cap today is only £1.7bn (a relative minnow in the global tech/AI world).
Also, the firm’s first software product — Raspberry Pi Connect, which offers remote access and over-the-air updates — now has more than 500,000 registered devices. This platform should help to build a durable moat, protecting it from lower-cost Chinese hardware rivals.
Am I buying?
As exciting as this sounds, there are currently a couple of big risks. One is that its product prices will rise in 2027 due to the DRAM chip shortage, which will boost revenue but could hurt overall demand and margins.
The second is a sky-high forward earnings multiple of 73. To me, this valuation looks a bit overripe, even after the stock’s recent 17% pullback.
That said, I’m still very interested in Raspberry Pi, so it remains on my watchlist. I’m just waiting for a lower share price.
Should you invest £5,000 in Raspberry Pi Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Raspberry Pi Plc made the list?
Ben McPoland has no position in any of the companies mentioned.
