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Investing.com - HSBC downgraded Lotes Co Ltd (TPE:3533) stock rating from Buy to Hold and lowered its price target to NT$1,600.00 from NT$1,700.00, citing delayed materialization of AI-related revenue contributions.
The research firm noted that expected revenue upside from GB300’s adoption of SOCAMM has been pushed to the next generation product, Vera Rubin. HSBC also highlighted ongoing difficulties with GPU socket adoption due to warping issues, despite continued development for the Vera Rubin generation.
HSBC acknowledged some positive developments, including Lotes’ Quick Disconnect (QD) technology approaching mass production readiness, though it will have limited contribution this year. The company also maintains its position as a key supplier of power cables and connectors for Nvidia (NASDAQ:NVDA)’s PCIe GPU.
The research firm projects that QD and power cables combined will account for only about 5% of Lotes’ revenue by 2026, with the mass production timeline for other Lotes AI products remaining unclear.
HSBC expects market sentiment toward Lotes to improve when Vera Rubin or the Cordelia form factor reach mass production readiness, which it anticipates will likely occur in late 2026.
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