Delta Electronics faces valuation challenges, with the thousand-dollar mark becoming a short-term key—fundamentals remain solid, but timing choice tests investors

AI Infrastructure Upgrade Sparks Power Revolution, Delta Electronics Positioned at Industry Frontline

The global tech industry is experiencing a profound transformation in power supply architecture. According to the latest foreign research, NVIDIA plans to launch the Rubin GPU series in the second half of 2026, which will adopt micro-channel cover cooling design. The thermal design power (TDP) of the dual-chip version will reach 2300 watts, setting unprecedented requirements for cooling solutions.

This upgrade’s scale far exceeds expectations. The power consumption of AI server racks is projected to jump from the current GB series’ 130 kW to Vera Rubin’s 220 kW, with the future Rubin Ultra version potentially surpassing 600 kW. This indicates that the global power supply system is accelerating its shift from traditional AC to high-voltage DC architecture and independent power cabinet designs. A market restructuring worth hundreds of billions of dollars has already begun.

As a leader in power management, Delta Electronics (2308) and Lite-On Technology are both identified as the main beneficiaries of this industry transition. Fundamental analysis shows that the company will continue to benefit from the AI infrastructure upgrade wave in the coming years, providing long-term logical support for its stock price.

Capital Expansion Reaches New Heights, Capacity Deployment Accelerates

From a fundamental perspective, Delta Electronics’ capital expenditure this year reached NT$40 billion, with the same level of investment expected next year. The proportion of equipment and automation investments will rise to 65%, a new high. This reflects management’s strong confidence in the AI power and cooling markets.

The company is actively expanding capacity in Thailand, Taiwan, and the US, focusing on AI server power supplies and liquid cooling products. Notably, the US subsidiary has completed a large lease agreement for a building in Plano, Texas, covering 226,000 square feet (about 6,300 ping), with a lease term of 7.5 years, scheduled to start operation in April 2026. This move continues the Texas FWT laboratory construction plan initiated last year, demonstrating the group’s determination to expand into the North American market.

Strong Profit Growth Momentum, Earnings Expected to Accelerate

Fundamental data indicates that market estimates for Delta Electronics’ EPS this year are NT$23.8. Driven by increased shipments of AI-related products next year, earnings are expected to rise to NT$33, with a year-on-year growth rate of 38.7%. This double-digit growth provides solid downside support for the stock price and confirms the reliability of long-term investment logic.

Short-term Technical Correction, Key Resistance at NT$1,000

Despite the bright fundamental outlook, the short-term stock price trend faces challenges. Delta Electronics has recently been oscillating around NT$950. This week, with a strong rebound in the Taiwan stock market, the stock surged 4.39% intraday to recover NT$950, but then stabilized. On the 27th, it fell 0.32%, and subsequently failed to break above NT$950, closing at NT$932, down 1.06%.

From a technical perspective, since reaching a historical high of NT$1,085, Delta has been correcting. Although it has recently regained the short-term moving averages (5-day, 10-day, and quarterly), the monthly line remains a significant resistance. Market analysis suggests that the cumulative gain this year has exceeded multiples, and a recent 20% correction is a reasonable technical adjustment. However, current valuation levels are still relatively high.

Valuation and Timing as Core Considerations

Analysts point out that, despite strong long-term fundamentals, short-term stock prices have already reflected recent positive news. With heavy resistance at NT$1,000, it is not advisable for passive investors to chase the stock blindly. The current price approaching NT$1,000 limits profit potential, so large capital additions at this point are also not recommended.

New Electronic Options Regulations Bring Liquidity Changes, Market Structure Adjustment

The Taiwan Futures Exchange will implement adjustments to electronic options contracts on December 8, reducing the contract multiplier from NT$1,000 per point to NT$250, significantly lowering the contract value from about NT$1.6 million to NT$400,000. This move aims to effectively reduce trading barriers and further invigorate trading activity in derivatives related to electronic indices.

As one of the top five market-cap stocks in the electronics sector, Delta Electronics, along with TSMC, Hon Hai, MediaTek, and Quanta, accounts for nearly 70% of the total market value of the electronics sector. Its dominant position means that Delta’s stock price volatility will directly influence the electronic index and generate significant leverage effects through derivatives.

Electronics stocks have long accounted for over 70% of Taiwan stock market trading volume. Driven by the booming AI applications and semiconductor industries, the electronic index has continued to outperform the weighted index. As a key component of the index and with dual themes of AI power supplies and cooling solutions, Delta Electronics holds a strategic advantage in the industry trend.

Mid- to Long-term Deployment and Monitoring Focus

Fundamental analysis suggests investors should focus on the upgrade process of AI infrastructure, especially the launch schedule of NVIDIA’s new platform in 2026, which will be a key industry indicator. Additionally, close attention should be paid to the progress of Delta’s new capacity in Thailand and the US, as well as the actual contribution of liquid cooling products to revenue.

Investors should continuously monitor the following key indicators:

• Trends in open interest of electronic options
• Shipment progress of AI server power products
• Trends in gross margin and operating margin
• Changes in foreign institutional holdings
• Capacity utilization rate of new US factories

Simultaneously, attention should be paid to the liquidity changes after the December electronic options reform and whether global AI capital expenditure shows cyclical adjustments, as these will directly impact Delta’s medium-term stock performance.