Is the Raspberry Pi Rally Overdone?

Raspberry Pi (LON: RPI) shares have surged over 51% in the past three months, but the rally may have gone too far. That’s according to HSBC analysts in a note this week.

The bank downgraded the stock from “Buy” to “Reduce,” raising concerns about the near-term prospects for further significant gains.

Raspberry Pi is up significantly since late November, hitting a high of over 726p a share just after Christmas. It currently trades at around 574p after a 6% decline in Monday’s session following the HSBC downgrade.

Despite increasing its price target for the stock from 440p to 500p, HSBC highlighted a lack of immediate catalysts to drive the share price meaningfully higher.

The analysts described the recent surge, referred to as a “Santa rally,” as excessive, saying it has been “overdone.” The bank cautioned that current market enthusiasm might be overly optimistic.

“While we like the long-term story for Raspberry Pi, we think the Goldilocks scenario is asking too much,” the analysts noted, suggesting that expectations for continued rapid growth may be unrealistic without clear, short-term drivers.