From Disney to AMD: Adeia Makes Money from Patents. How Can AI Boost Its Revenue?

Adeia—a company with a market capitalization of less than $3 billion—receives licensing fees from Amazon, Google, Disney, and AMD in exchange for granting access to its patents. The company started out in chip packaging technology and now also licenses technologies for streaming and e-commerce. In August, Adeia raised its long-term annual revenue forecast by 20%, to $600 million—about a third higher than last year’s result. The company sees the semiconductor sector as promising: it has doubled its annual revenue target for that segment.

How Adeia plans to achieve its goals, what role litigation plays in its business, and what analysts attribute the stock's potential to—read about it in this Oninvest article.

Adeia holds more than 14,000 patents and patent applications worldwide. The company develops technologies and grants customers the right to use its intellectual property when creating products in the media, entertainment, electronics, and semiconductor industries. About 85% of the patent portfolio is developed in-house through the work of its engineers and researchers.

Adeia has two main areas of focus. Media technologies involve content discovery and recommendations, video recording and transmission, and personalization. These technologies are used in pay TV, streaming, social media, and consumer electronics. The semiconductor portfolio includes chip interconnect and packaging technologies.

The company's history began in 1990 with Tessera Technologies, which developed semiconductor packaging technologies. In 2016, Tessera acquired digital audio developer DTS for $850 million—whose technologies were used in smartphones and tablets from Huawei, Acer, and Asus—and was renamed Xperi Corporation. In 2020, it merged with TiVo, which owned technologies for video recording, search, and content recommendations.

In the fall of 2022, the product business was spun off into a separate company, Xperi Inc., while the intellectual property licensing business remained with the original company, which was renamed Adeia (from the Greek word for “to license”). The company explained the split as an opportunity to develop the two business lines independently, without competition for capital or management attention.

Adeia licenses technologies in the field of hybrid bonding for chips, an area on which it has placed its bets. In 2023, the company entered into long-term agreements with NAND memory manufacturer Kioxia, storage device manufacturer Western Digital, and radio frequency chip developer Qorvo. In March 2026, it announced a multi-year licensing agreement with AMD.

“Hybrid bonding… is as inevitable as Thanos,” wrote Roth analyst Scott Searle in a September 14 report (on file with the editorial staff). According to his assessment, hybrid bonding technology is becoming increasingly important for the next generation of semiconductors—from processors for AI and data centers to AI-enabled devices and optical interconnects.

Hybrid bonding allows individual crystals to be tightly bonded together to form complex chips. As Maxim Group analyst Matthew Galinko explains in a report dated August 5, higher connection density improves bandwidth, energy efficiency, and thermal performance. He cites the technology as one of the tools for boosting processor and memory performance.

Analyst Roth calls Adeia’s agreement with AMD “the tip of the iceberg.” He notes that Broadcom and Intel will launch products using hybrid interconnects in 2026, while Nvidia, he expects, will begin implementing the technology in its Feynman processor in 2028. The analyst also forecasts market growth driven by major cloud companies’ proprietary chips and AI-powered devices.

Against this backdrop, Adeia raised its long-term annual revenue target by 20%—to $600 million. For 2025, the company’s revenue totaled $443.4 million. The company expects its semiconductor division to generate $200 million annually—twice its previous target. In the second half of 2026, revenue from this division totaled $48.3 million, or approximately one-fourth of the company’s total revenue.

Roth analyst considers the target conservative and believes that Adeia will reach it by 2030–2031. At the same time, he emphasizes the uncertainty surrounding the timing of contract signings: he expects new agreements with chip manufacturers to be signed primarily in 2027, and renewals of memory manufacturers’ licenses to occur toward the end of 2027–2028.

Following its separation from Xperi, Adeia's business relied heavily on pay TV, the company noted, but it gradually expanded its customer base in streaming and other segments.

In late 2024, Adeia entered into multi-year agreements with Amazon and Canon for access to its media portfolio. In materials for the shareholders’ meeting, the company described the deal with Amazon as the largest to date in the OTT sector—services that deliver video directly to users over the Internet.

In late 2025, Disney signed a licensing agreement. In the second quarter of 2026, Adeia renewed its contract with Google, which includes YouTube TV.

E-commerce has emerged as another key area. Adeia's solutions for intelligent search, recommendations, personalization, virtual shopping, and social media sales are in high demand in this sector.

In the second quarter, the company signed an agreement with L’Oréal and a contract with RPX, a patent risk management firm. The latter immediately added ten clients in the e-commerce sector.

At the end of the second quarter of this year, Adeia’s total revenue rose 12% year-over-year to $96 million, while net income increased by nearly 4% to $17.4 million. According to Roth’s estimates, media revenue outside of pay TV grew by 15–20% in the first half of 2026. He expects streaming and e-commerce to drive growth in this segment by 15% or more annually through the end of the decade. E-commerce, according to Roth’s forecast, could account for 10–15% of total revenue in the near term.

Adeia enters into some of its agreements following legal disputes. The company explains that some users of its patented technologies refuse to obtain a license, so it has to go to court to protect its intellectual property.

In November 2024, Adeia filed a series of lawsuits against Disney, alleging that Disney was infringing on nine patents in Adeia’s intellectual property portfolio. The infringements were related to streaming services’ use of technologies for enhanced video streaming, cloud data storage, tracking episode viewing progress, and other technologies, Reuters reported. An agreement reached in late 2025 settled the patent disputes and granted Disney access to the company’s media portfolio. The dispute with AMD ended in a similar manner: after filing lawsuits in November 2025, the parties signed a licensing agreement in March 2026.

However, litigation involves costs, and its duration and outcome are difficult to predict, as noted in an analytical report by Maxim Group. In July 2026, Adeia filed a new lawsuit against FuboTV, accusing the company of using four patented media technologies without a license. Maxim Group forecasts Adeia’s litigation expenses at $33.8 million for 2026, compared to $24.7 million the previous year. The company does not typically disclose the financial terms of settlements and litigation.

On September 14, Roth maintained its “buy” rating and $43 price target. The analyst links the stock’s outlook to the expansion of hybrid bonding licensing, as well as growth in streaming and e-commerce. In his view, a more significant contribution from new agreements could lead to an increase in Adeia’s market valuation.

Roth's target price corresponds to approximately 25 times the projected adjusted annual earnings per share for 2027. At the share price of $26.71 used in the report, the stock was trading at a price-to-earnings ratio of approximately 15.9. In the long term, Roth anticipates the stock price could rise to $50 or higher.

On August 5, Maxim Group also maintained its “Buy” rating and raised its price target from $35 to $39. The analyst bases this assessment on the expansion of the licensing business and an expected reduction in debt. The new target price is based on a projected 2028 EBITDA of 14.5.

Among the risks to their forecasts, analysts cite the contraction of the traditional pay-TV market, uncertainty regarding the timing of new agreements, patent defense costs, and potential difficulties with license renewals. Roth separately notes that investments in R&D may not yield a financial return for several years.

According to Marketwatch, Adeia has four analyst ratings, all of which are “buy” recommendations. The average price target is $43—which implies growth potential of nearly 70% relative to the closing price on October 1.