On Tuesday, an analyst from Bernstein SocGen Group has increased the price target for MediaTek Inc. (2454:TT) (OTC: MDTKF) to NT$1,680.00, up from the previous NT$1,350.00, while maintaining an Outperform rating on the shares. The revision reflects the company's better-than-expected performance in the high-end smartphone segment, which the analyst attributes to advancements in Edge AI technology.
The analyst observed a trend where MediaTek's flagship System on Chip (SoC) is expected to increase in shipments from 7 million units at $136 per unit last year to 13 million units at $144 per unit this year. The increase in price target is partly due to MediaTek's flagship SoC's forecasted growth and the competitive landscape, where Huawei's share loss is anticipated to be smaller. Huawei's need to allocate more capacity to AI accelerators and experiencing lower handset demand is likely to benefit MediaTek.
MediaTek's mobile revenue faced challenges due to an inventory correction last year, but the analyst predicts that the company will be free from this correction and is set to outpace the end handset demand in the current year. The positive outlook is further bolstered by MediaTek's progress in the high-end segment.
The analyst suggests that MediaTek's strides in the high-end smartphone market will enhance the company's growth prospects. The performance uptick is tied to the company's flagship SoC and the broader competitive dynamics in the industry, which are seen as favorable for MediaTek.
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