Peraso (PRSO): A High-Conviction Buy Amid Strategic Turnaround and mmWave Market Breakout

The mmWave technology sector is on the cusp of a transformative phase, driven by surging demand for high-speed wireless connectivity, defense modernization, and 5G infrastructure. Amid this backdrop, Peraso Inc. (NASDAQ: PRSO) stands out as a compelling investment opportunity. The company's strategic pivot from legacy memory ICs to mission-critical mmWave solutions, coupled with a disciplined cost structure and a compelling valuation, positions it as a high-conviction buy for investors seeking exposure to a nascent but high-growth market.

Near-Term Revenue Recovery: A Foundation for Growth

Peraso's Q2 2025 results underscored both challenges and progress. Total net revenue declined to $2.2 million, primarily due to the completion of end-of-life shipments for memory IC products. However, this decline masked a critical inflection point: mmWave product revenue surged 46.7% sequentially to $2.2 million, representing over 200% year-over-year growth. This shift reflects the company's successful realignment toward its core mmWave business, which now accounts for 100% of revenue.

Cost discipline has been a cornerstone of Peraso's turnaround. Operating expenses fell to $2.9 million in Q2 2025, down from $6.8 million in the same period in 2024, driven by reduced stock-based compensation and one-time charges. The GAAP net loss narrowed to $1.8 million ($0.31 per share), a 68% improvement year-over-year. Management's guidance for Q3 2025—$2.8–3.1 million in revenue—further signals confidence in the company's ability to leverage its 14 production customers and $1.4 million follow-on order from a South African wireless provider.

Long-Term Market Expansion: Defense and 5G as Growth Catalysts

Peraso's long-term value proposition lies in its ability to scale mmWave technology into high-margin, mission-critical markets. The company has already secured first production shipments of its 60 GHz stealth communication systems for a lead customer in tactical defense, leveraging its Perspectus module with anti-jamming and low-probability-of-detection capabilities. With global defense budgets projected to exceed $485 billion in 2024 and NATO's push to increase military spending to 5% of GDP by 2035, Peraso is well-positioned to capitalize on this trend.

In the 5G and FWA space, Peraso's DUNE platform is addressing bandwidth congestion in urban areas like Los Angeles, while partnerships with Tachyon Networks and Richardson RFPD are expanding its reach in Asia-Pacific and Africa. The company's recent entry into the education sector—shipping a wireless video system for classrooms—further diversifies its addressable market. With the EdTech sector projected to grow to $348 billion by 2030, Peraso's mmWave solutions offer a scalable, low-latency alternative to Wi-Fi.

Compelling Valuation: A Catalyst-Driven Turnaround Story

Peraso's valuation remains strikingly attractive. As of August 2025, the company trades at a price-to-sales (P/S) ratio of 0.20 and a market cap of $4.27 million, despite generating $9.3 million in mmWave revenue over the past four quarters. This disconnect between fundamentals and market price creates a significant margin of safety for investors.

Analyst sentiment is bullish, with David Williams of Benchmark reiterating a “Buy” rating and a $3.00 price target—a 158% upside from the current price. This target is underpinned by Peraso's $1.1 million ATM financing, $1.8 million in cash reserves, and a declining burn rate. The company's exploration of strategic alternatives, including mergers or non-dilutive financing, adds further upside potential.

Investment Thesis: A High-Conviction Buy

Peraso's strategic transformation, coupled with its technological leadership in mmWave, presents a rare combination of near-term operational progress and long-term market potential. Key risks include execution challenges in scaling production and the capital-intensive nature of R&D. However, the company's 40 granted patents, cost discipline, and alignment with U.S. policy tailwinds (e.g., CHIPS Act, BEAD Act) mitigate these risks.

For investors with a 12–24 month horizon, Peraso offers an asymmetric risk-reward profile. The stock's current valuation discounts its potential to become a dominant player in mmWave-driven defense and FWA markets. A $3.00 price target would imply a $90 million market cap, a 20x multiple on its projected 2025 mmWave revenue.

Actionable Takeaway: Accumulate PRSO at current levels, with a stop-loss below $1.00. Monitor Q3 2025 results for confirmation of sequential revenue growth and updates on defense contract progress.

In conclusion, Peraso is a high-conviction buy for investors seeking exposure to the mmWave revolution. Its strategic turnaround, expanding addressable markets, and compelling valuation make it a standout in a sector poised for explosive growth.