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MediaTek Price Target Raised to NT$7,300 as AI ASIC Momentum Accelerates
Electronic Technology · Semiconductors · economic_daily · 2026-11-02
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Following a strong earnings report, eight major brokerages including UBS have upgraded their outlook on MediaTek, citing robust growth in its AI ASIC business.
What Happened
Strong Analyst Sentiment: MediaTek's recent earnings call exceeded market expectations, prompting eight major brokerages, including UBS, Goldman Sachs, and Morgan Stanley, to maintain bullish ratings. UBS led the pack by setting a price target of NT$7,300, highlighting the company's significant growth potential in the AI ASIC sector.
TPU Revenue Outlook: Management has raised its 2024 TPU revenue forecast to $2.5 billion and increased the 2027 target to $16 billion, driven by steady demand from Google for training chips. The company also clarified that the TPU v9 remains on track for mass production in Q1 2028, dispelling market rumors regarding potential tape-out delays.
New Strategic Client: MediaTek confirmed a second major cloud ASIC client, with revenue contributions expected to begin in 2028. While the client's identity remains undisclosed, analysts speculate it could be Tesla or xAI, potentially adding $4 billion to $9 billion in annual revenue and providing a significant boost to long-term profitability.
Earnings Forecast Upgrades: UBS believes the market continues to underestimate MediaTek's execution capabilities in cloud AI, leading to a 5% increase in its 2024 EPS forecast. With minor upward adjustments to 2027-2028 earnings projections and a 27x P/E multiple, the firm maintains a 'Strong Buy' rating on the stock.