From 232 to 138: Will Institutions Keep Buying? 'Power Device Giant' Stock Halves, New Target Price Revealed

As AI servers continue to expand, market attention is not only focused on core chips like GPUs and ASICs but also increasingly turning to power semiconductors responsible for power conversion and energy management. With data center power consumption continuously rising, demand for mid-to-high-end power components is expected to grow in tandem, presenting new growth opportunities for related supply chains. Among them, power component giant Strong Power (2481) has recently experienced significant stock price volatility, briefly reaching 232.5 on July 6 before sharply pulling back and recently falling below 140. However, despite this substantial correction, institutional investors have turned more positive on the company’s outlook, citing strong AI power semiconductor demand, progress in SiC MOSFET deployment, and benefits from product price increases. They have further raised Strong Power’s target price to 205 and upgraded their investment rating to 'Strong Buy'.

Strong Power closed today (20th) at 138.5, up 2, a gain of 1.47%. Calculated from its peak of 232.5, the current stock price remains significantly corrected. The upward revision in target price by institutions has brought renewed market focus on whether Strong Power’s fundamentals can drive a rebound.

AI Server Power Consumption Rises – Power Semiconductors Emerge as Key Beneficiaries

As AI server computing power continues to improve, data centers’ requirements for power supply, energy conversion, and efficiency management are also increasing. Compared to traditional servers, AI servers consume significantly more power, elevating the importance of power semiconductors in power management systems. Analysts point out that as AI applications continue to expand, mid-to-high-end power semiconductors have already entered a phase of shipment growth. Additionally, major international players are successively raising the total addressable market (TAM) for power semiconductors in AI data centers (AIDC), indicating an overall positive industry outlook. Strong Power is also actively expanding into SiC MOSFETs. Analysts believe that if AI data centers continue to expand and high-performance computing equipment demands higher energy efficiency, the application of advanced power semiconductors like SiC could further expand, becoming a key growth driver for Strong Power.

Stock Pulls Back from 232.5 High – Institutions Still Bullish on Fundamentals

Strong Power’s stock performance this year has been volatile, peaking at 232.5 on July 6 before steadily declining and now falling below the 140 threshold. However, institutions argue that Strong Power’s Q2 financial results outperformed peers, and its AI-related revenue contribution is relatively high, yet its current market valuation remains below that of Western counterparts—creating a gap between fundamentals and stock valuation.

On the other hand, Strong Power has already benefited from product price hikes. Institutions believe the overall power semiconductor industry cycle is still in its early upward phase. As AI applications continue to expand, demand for mid-to-high-end power semiconductors is expected to grow further, serving as a key driver supporting Strong Power’s future operations.

Q3 Gross Margin Forecast at 35.45%, 2027 EPS Revised Up to 8.29

In terms of profit forecasts, institutions have simultaneously raised Strong Power’s financial estimates, projecting a Q3 gross margin of 35.45%, post-tax net profit of NT$621 million, and quarterly EPS of 1.63. Looking ahead to 2026, institutions estimate Strong Power’s EPS at 5.27; for 2027, EPS has been revised upward from the initial 7.60 to 8.29, representing a year-on-year increase of 57.3%. Based on the upward revision in earnings expectations, institutions applied a 25x P/E multiple to the 2027 EPS to revalue the stock, raising Strong Power’s target price to 205 and upgrading the investment recommendation to 'Strong Buy'.