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Investing.com -- European semiconductor stocks are showing resilience despite facing short-term headwinds, according to a recent analysis by Kepler Cheuvreux.
The investment firm maintains a constructive stance on European chip manufacturers, noting that the semiconductor market remains in an upcycle with many vendors trading at attractive valuation levels for the next 2-3 years.
Kepler Cheuvreux has identified three top performers in the European semiconductor sector that investors should watch closely:
Infineon: Infineon continues to demonstrate strong fundamentals. The company earned a Buy rating with a target price of EUR44. Kepler analysts highlight Infineon’s strategic positioning in key growth markets and its ability to navigate current market challenges while maintaining competitive advantages.
In recent developments, Infineon reported third-quarter revenue of €3.59 billion and provided fourth-quarter revenue guidance of €3.6 billion, with both figures coming in below consensus estimates.
Nordic Semiconductor: This company secured the second spot on Kepler’s list with a Buy rating and a target price of NOK190. Nordic Semiconductor has benefited from the gradual recovery in consumer markets during Q2, despite ongoing trade tensions.
The firm reported that smartphone volumes increased slightly by low single digits year-over-year, PC volumes rose by mid-single-digits, and consumer electronic products experienced a significant recovery. This positive trend in consumer electronics has particularly benefited Nordic Semiconductor’s business outlook.
Besi: Recently added to Kepler’s Most Preferred Stocks list, Besi received a Buy rating with an impressive target price of EUR140. While the company delivered in-line results, it faced weaker bookings and provided soft guidance for Q3. However, Kepler analysts note that Besi struck a more constructive tone about future prospects, highlighting stronger hybrid bonding demand expected in the second half of 2025, supported by Samsung’s anticipated adoption in HBM4.
The company is also gaining traction for its TCB Next platform. Despite cutting 2025-27 estimates by up to 17% due to foreign exchange factors and slower hybrid bonding monetization, Kepler still sees potential for Besi’s sales to double and EBIT to triple by 2028 if hybrid bonding adoption broadens.
Morgan Stanley reiterated its Overweight rating on Besi and increased its price target to €190, citing expectations for strong growth in the company’s hybrid bonding technology.
The analysis emphasizes that execution, pricing, and customer phasing remain critical factors that will determine the success of these semiconductor companies in the coming years.
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