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On Monday, Goldman Sachs revised its outlook on Quanta Computer Inc. (2382:TT) (OTC: QUCPF), downgrading the stock from Buy to Neutral. The firm also lowered the price target to NT$293.00 from NT$371.00 due to a downward revision in rack-level AI server volume forecasts and uncertainties in demand and supply.
The downgrade comes as Goldman Sachs analysts, including Allen Chang, anticipate a decrease in the expected volume of rack-level AI servers for the years 2025 and 2026. The new forecast predicts 19,000 units in 2025 and 57,000 units in 2026, a significant drop from the previously estimated 31,000 and 66,000 units, respectively.
In response to the revised server volume forecast, Goldman Sachs has also adjusted its coverage of the Taiwan ODM/cooling supply chain, which includes companies like Hon Hai (TW:2317), FII, Wistron, AVC, and Auras. These adjustments have led to a reduction in price targets ranging from 7% to 21%.
Despite the downgrade, Goldman Sachs expects the second quarter of 2025 to be strong for the Taiwan ODM/cooling supply chains, bolstered by the production ramp-up of rack-level AI servers. However, the firm maintains a conservative stance on the full-year volume, cautioning that the product transition period in the third quarter of 2025 may negatively affect volume once again.
The revised price target of NT$293.00 reflects a more modest upside potential for Quanta Computer’s stock compared to its industry peers. Goldman Sachs’ decision underscores the impact of product transitions and market uncertainties on the company’s future performance.
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