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On Thursday, UBS analysts upgraded Aspeed Technology Inc (5274:TT) stock from Neutral to Buy, raising the price target to NT$5,000 from NT$3,500. The analysts cited positive growth prospects for Aspeed’s baseboard management controllers (BMC) in AI and traditional servers over the next three years as a key factor in their decision.
UBS analysts highlighted an anticipated increase in demand for Aspeed’s BMCs from AI servers, projecting a rise of 81% in 2025 and 59% in 2026, reaching 4.3 million and 6.8 million units, respectively. This demand is expected to represent 26% of total BMC shipments in 2025 and 36% in 2026. The analysts also noted the potential for ASIC servers to contribute approximately 10% of BMC shipments by 2026.
The stock has seen a 24% correction from its peak in August 2024, attributed to a conservative view of the BMC inventory cycle, macroeconomic uncertainties, and delays in Nvidia (NASDAQ:NVDA)’s Blackwell server ramp. Despite these challenges, UBS analysts remain optimistic about the company’s future.
Positive factors influencing Aspeed’s outlook include sustained investment in Cloud AI, which is less likely to be affected by tariffs, and improved production of Blackwell server racks. Additionally, developments in ASIC technology by companies like Amazon (NASDAQ:AMZN) and Meta (NASDAQ:META) are expected to support growth.
Aspeed Technology’s focus on AI and ASIC server markets positions it for potential gains, according to UBS, which reflects the firm’s constructive stance on the company’s growth trajectory.
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