CEVA (CEVA) is in focus after a U.S.-based semiconductor customer selected its integrated Bluetooth High Data Throughput platform and Lenovo adopted its RealSpace spatial audio software, highlighting fresh commercial traction across connectivity and audio.

Despite a 3.9% decline in the 1 day share price return to US$36.51 and a softer 7 day move, CEVA’s 30 day share price return of 55.89% and 90 day share price return of 61.05% point to strong recent momentum. The 1 year total shareholder return of 71.97% and 3 year total shareholder return of 67.55% contrast with a 5 year total shareholder return that is down 14.84%, suggesting renewed optimism around recent customer wins and product traction.

If CEVA’s recent wireless and AI traction has your attention, it could be a good moment to look at other chip related opportunities through 42 AI infrastructure stocks

With CEVA’s shares up strongly over the past year but still trading below the average analyst price target, are investors looking at a reasonable entry point, or is the recent momentum already pricing in future growth?

Most Popular Narrative: 15.3% Undervalued

CEVA’s most followed narrative points to a fair value of $43.13 against the last close at $36.51, framing the recent share price strength as still leaving upside on the table according to those assumptions.

Accelerating customer adoption of CEVA's Edge AI NPUs (as evidenced by multiple new, high-impact licensing deals and the integration of NeuPro architectures across diverse markets like audio, video, and infrastructure) lays the foundation for materially higher royalty revenue per device as these AI-enabled products ramp into mass production over the next 18 to 24 months.

Want to see what is baked into that fair value? The narrative leans heavily on sustained revenue growth, margin repair, and a rich future earnings multiple. The specific mix of growth, profitability, and valuation assumptions is where the real story sits.

Result: Fair Value of $43.13 (UNDERVALUED)

However, this hinges on royalty growth actually materialising, and heavy reliance on a few large customers means that any shift in their plans could quickly challenge that thesis.

Another View: SWS DCF Flags Downside Risk

While the narrative fair value sits at $43.13, the SWS DCF model points the other way, with an estimated future cash flow value of $16.28 and CEVA trading at $36.51. That implies the stock is priced well above this model. Which story do you trust more right now?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CEVA for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

The mixed signals around CEVA’s value make this a moment to move quickly, review the numbers yourself, and decide where you stand, starting with the 1 key reward and 1 important warning sign

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.