Analyst Brad Lin of Bank of America Securities reiterated a Buy rating on ASE Technology Holding Co (ASX – Research Report), with a price target of $13.00.
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Brad Lin has given his Buy rating due to a combination of factors including ASE Technology Holding Co’s promising growth outlook in AI-related businesses. The company is expected to see its AI revenue climb significantly from US$0.6 billion in 2024 to US$1.6 billion in 2025, driven by strong demand for advanced packaging and testing services. ASE is optimistic about its CoWoS capacity, anticipating continued undersupply which is favorable for pricing power.
Another factor supporting the Buy rating is the projected improvement in gross margins, partly due to a shift towards a more favorable product mix and a rapidly growing testing business. This sector is forecasted to expand at twice the rate of packaging, further enhancing margins. Additionally, potential order shifts from Chinese competitors due to regulatory constraints could benefit ASE. The company’s valuation is attractive, with a 2025 estimated price-to-book ratio of 1.8x, which is within its historical range. These factors collectively signify a strong industry position for ASE Technology Holding Co.