Few FTSE 250 stocks deliver 60%+ gains in any given year. But Raspberry Pi‘s (LSE:RPI) shares delivered a massive 67% gain in just the last two days of March.
Usually, such sudden share price surges are triggered by the announcement of a potential acquisition offer. But that’s not what happened this time around. Instead, this massive jump started the day before the company released its full-year results for 2025, and then continued the day after.
What was it that got investors so excited? What was in the report that kept the momentum going the next day? And could investors be looking at the start of a Rolls-Royce-style price rally over the coming years?
What’s going on with Raspberry Pi?
To understand what happened last month, we actually need to go back to February. Viral social media videos emerged showing clusters of Raspberry Pi boards running customised AI agents. In simple terms, these are special programmes that use AI to automate certain tasks.
With the company having already previously guided that it would beat adjusted EBITDA analyst expectations in January, and the CEO subsequently starting to buy shares in February, investors were going into these full-year results with a lot of excitement, driving up the stock price even before the report was released.
The numbers then confirmed that this excitement wasn’t misplaced:
- Revenue jumped 25% from $259.5m to $323.2m.
- Adjusted EBITDA shot up 25% from $37.2m to $46.4m.
- Pre-tax profits expanded by 63% from $16.3m to $26.5m.
But it wasn’t just last year’s figures that got the market excited. Even with rising memory costs and emerging supply chain challenges, management confirmed it expects revenue to climb “materially higher”, suggesting the gravy train could only just be getting started.
So is this FTSE 250 stock potentially the next Rolls-Royce?
Bull versus bear
The tremendous returns generated by Rolls-Royce shares came from a new management team streamlining the business and unlocking exceptional operating leverage. The result was a restoration of profit margins and a massive resurgence of free cash flow that delivered close to a 1,200% return for shareholders over three years.
Raspberry Pi’s now also showing signs of its ability to deliver impressive operating leverage. However, the firm’s in quite a different situation and may have a harder time than Rolls-Royce in delivering a 12x return.
Rolls-Royce leveraged long-cycle contracts in the established civil and defence aerospace sector. By comparison, Raspberry Pi’s growth is dependent on AI adoption for edge computing within primarily the industrials sector.
It’s a much younger market that’s far more challenging to forecast, especially as we enter a period of higher memory costs that could deter or delay spending due to industrial giants pulling back on non-crucial spending.
All of this is to say that the bull case for Raspberry Pi is real, but investors wanting to hop aboard should be braced for some potentially wild volatility.
