As the Raspberry Pi share price soars, is it set to be a great UK growth success?

What’s a super successful UK stock market IPO? It’s one we’ve just had, as the Raspberry Pi share price reaches for the sky.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Midnight is celebrated along the River Thames in London with a spectacular and colourful firework display.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The Raspberry Pi (LSE: RPI) share price was set at 280p for IPO. Even with the price at the top of the expected range, hopeful shareholders oversubscribed the offer multiple times. The shares quickly rose in pre-market trading.

Then it stormed ahead spectacularly when full trading started on 14 June, opening at a whopping 50% above the IPO price.

And at the time of writing, the shares are up a fair bit further, for a stunning 70% gain, so far.

Should you invest £1,000 in Apple right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool 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 Apple made the list?

See the 6 stocks

UK tech stocks

Dan Coatsworth, investment analyst at AJ Bell, said: “There is a widely held view that tech companies only float in the US where they can potentially get a higher valuation. Raspberry Pi is proof that the UK can still compete against the likes of the Nasdaq and attract home-grown champions.

It surprised me to learn that Raspberry Pi planned to float in the UK. And I’ve been surprised to see how well the share price has performed in the short time since. They were both pleasant surprises.

Unlike a lot of tech stocks that float in their early days, Raspberry Pi’s profitable. It’s not a ‘jam tomorrow’ offer that we see so often, and that might help keep the stock a bit more stable than some.

Well, that’s a hope anyway. I still expect to see a fair bit of volatility in the next few years, and today’s investors might have to hang on to their hats.

Nasdaq high

Hitting the IPO when the Nasdaq’s at a big all-time high might also have added to the risk. I mean, the US tech index has soared by 125% in the past five years. And, so far in 2024, we’re well above the highs we saw in late 2021.

The timing’s almost certainly boosted the cash the firm was able to raise. And it will have given a helping hand to the momentum of this first few days of trading.

But is it a good idea to buy into a tech growth stock IPO when the market’s on a high and the bulls are charging? I think that’s less clear.

The future

Looking forward, there’s a big lack of broker forecasts on the stock right now. So it’s hard for private investors to put any kind of valuation on it.

But I’ve seen suggestions that the global market for Raspberry Pi products could read $385m (£303m) by 2026.

The stock’s market-cap stands at £890m as I write, which suggests a price-to-sales ratio (PSR) of close to three. For a tech growth stock, that could turn out to be very cheap.

Some even suggest the whole market for small computing devices could reach £16.5bn. The potential could be big, but it’s a big unknown right now.

Time to buy?

This isn’t a stock I’ll buy as I just don’t go for tech growth these days. But it’s great to see such a successful UK IPO.

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Aj Bell Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Up 30% in weeks, does the BAE Systems share price still offer value?

The BAE Systems share price has been on a tear over the past couple of months. This writer sees limited…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Hunting for shares to buy as the market trembles? Remember this!

After a choppy week in global stock markets, our writer goes back to basics in his hunt for bargain shares…

Read more »

Investing Articles

3 simple principles to help build wealth in an ISA

As a new tax year opens up new ISA allowances for many investors, our writer shares a trio of things…

Read more »

Investing Articles

US trade tariffs: what they could mean for UK shares like Ashtead, Compass Group, and Experian

US trade tariffs continue to rock global markets, and the UK is no exception. Our writer considers how a new…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Dividend Shares

The Trump slump has smashed these FTSE 100 shares!

After a rough week for US and UK shares, investors have been shaken. But now these FTSE 100 stocks have…

Read more »

Investing Articles

£10,000 invested in Rolls-Royce shares 5 years ago is now worth…

Rolls-Royce shares have been on fire since April 2020. Part of this is the result of pandemic restrictions lifting, but…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

£10,000 invested in Tesla stock at its peak in 2024 is now worth…

Over the last few months, Tesla stock has lost nearly half its value. Here, Edward Sheldon explores a few takeaways…

Read more »

Investing Articles

Is the S&P 500 heading for an epic stock market crash?

Our writer shares his thoughts on a very crazy time for the S&P 500 and the wider stock market. How…

Read more »