JPMorgan maintains Overweight on Infineon Technologies and raises the Dec-27 target price to €96

Overview

This report is a company research update by JPMorgan on Infineon Technologies. The core conclusion is that Infineon has product coverage across multiple parts of the AI power value chain from the grid to the processor, and holds leading positions in key subsegments such as Silicon MOSFETs, Gallium Nitride FETs, and Silicon Carbide transistors; therefore, it should command a valuation multiple above its historical range. The report maintains an Overweight rating and raises the Dec-27 target price from €74 to €96.

Core views

The report believes Infineon’s main growth drivers come from three areas. First, AI data center power infrastructure is driving rapid growth in power semiconductor demand, benefiting the PSS division and microgrid-related demand. Second, the automotive semiconductor market is stabilizing amid inventory normalization and order recovery, while new technologies such as software-defined vehicles and ADAS enhance long-term growth potential. Third, price increases, operating leverage, and lower underutilization costs will push margins above Covid-cycle highs. JPMorgan forecasts FY27 revenue of €19.682bn and FY28 revenue of €22.852bn, with FY27/FY28 adjusted EPS of €2.86/€3.99, respectively.

Analysis framework

The report uses a combination of top-down AI data center capacity assumptions and bottom-up power semiconductor content estimates to size the AI power market and derive Infineon’s potential revenue contribution. At the same time, the report incorporates segment revenue, segment margins, underutilization costs, price increases, and operating leverage into its earnings forecasts, and values the target price using FY28 EPS and a 24x forward P/E multiple.

Methodology notes

• Valuation methodsForward P/E valuation

  24x FY28 EPS

  The Dec-27 target price of €96 is based on the FY28 EPS forecast and a 24x P/E multiple. The report believes Infineon’s leadership in AI power and structural growth in power infrastructure support a valuation above the past 10-year forward P/E quartile range of 15.6x-23.0x.

• Market sizingAI power market sensitivity analysis

  AI data center capacity multiplied by semiconductor content

  JPMorgan assumes about 62GW of new AI data center capacity in 2027 and about 81GW in 2028, and estimates semiconductor content at about $250/kW in 2028, implying that the AI power market could exceed $16bn in 2028, or about €14bn.

• Earnings forecastSegment forecast revision upward

  Revisions to revenue, segment profit, gross margin, and EPS

  The report incorporates AI power demand, GIP-related grid investment demand, pricing improvement, lower underutilization costs, and operating leverage into its forecasts, raising FY27/FY28 revenue, segment profit, and EPS.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Infineon Technologies (IFXGn.DE)

  Core covered name; the report maintains Overweight and raises the target price.

  Strengths

  Leadership in the AI power market, covering the power supply chain from the grid to the processor; leading advantages in submarkets such as MOSFETs, Gallium Nitride FETs, and Silicon Carbide transistors; automotive business accounts for about 50% of revenue and benefits from trends in software-defined vehicles and ADAS.

  Weaknesses

  Automotive end demand remains uncertain, having previously been affected by weak auto demand in China and the U.S., the phase-out of U.S. EV tax credits, and post-Covid inventory correction; the current share price valuation is already relatively high.

  Comparison

  The report notes that Infineon’s forward P/E quartile range over the past 10 years has been 15.6x-23.0x, with an average of 19.8x; JPMorgan assigns a 24x multiple this time, reflecting a premium versus the historical range.

  Risks

  A global economic recession, competitive pressure causing earnings to come in below expectations, and FX turning from a tailwind to a headwind could all affect the rating and target price outcome.

Key data

• RatingOverweightJPMorgan maintains the rating unchanged.
• Target price€96.00Dec-27 target price, previously €74.00.
• Current price€78.89As of June 24, 2026.
• Implied upsideapproximately 21.7%Calculated based on the target price of €96.00 and the current price of €78.89.
• 2028 AI power market size$16bn+, approximately €14bnBased on AI data center capacity and semiconductor content of about $250/kW.
• Infineon potential 2028 AI power revenueapproximately €4.2bnAssuming about 30% market share; the report’s new forecast is more conservative, using about €4bn in sales.
• FY27/FY28 revenue forecast revision2.3% / 7.4%Mainly driven by AI revenue in PSS and grid investment demand in GIP.
• FY27/FY28 EPS forecast revision10.4% / 19.0%Driven by higher revenue forecasts, pricing strength, lower underutilization costs, and operating leverage.
• FY27/FY28 adjusted EPS€2.86 / €3.99JPMorgan’s latest forecast.
• FY27/FY28 EBIT margin26.7% / 31.3%The report expects margins to approach 27% in FY27 and exceed 30% in FY28.

Impact & implications

If the report’s view plays out, Infineon’s investment narrative will expand from cyclical recovery to structurally driven growth powered by AI power and power infrastructure. On the revenue side, demand from AI data centers, microgrids, battery energy storage, HVAC, 800V protection, and Solid-State Transformers will provide support; on the profit side, price increases, lower underutilization costs, and improved operating leverage will be supportive. On valuation, JPMorgan believes the company should trade at a 24x forward P/E, above its historical range.

Risks

• If the global economy falls into recession, the target price assumptions may prove too optimistic.
• In a weak demand environment, rising competitive pressure may cause profitability to come in below forecasts.
• FX turning from a tailwind to a headwind may negatively affect revenue and margins.
• Although the automotive semiconductor market shows signs of stabilization, end demand remains unstable, and FY27 growth still depends on penetration of new technologies.
• If the AI power market size, Infineon’s share, or pricing improvement comes in below expectations, the upward revisions to revenue and margins may not materialize.

What to watch

• Whether AI data center additions and refresh capacity approach JPMorgan’s assumptions of about 62GW in 2027 and about 81GW in 2028.
• Whether Infineon’s market share in AI power remains at or approaches 30%, and whether 2028 AI power revenue approaches €4bn-€4.2bn.
• The implementation of the second round of price hikes in summer FY26 and the annual negotiations with automotive OEMs and tier-1s from November 2026 to January 2027.
• Whether FY27 underutilization costs decline significantly from about €650mn in FY26 to a normalized level of about €150mn.
• Whether improvement in automotive semiconductor demand, inventory, and European auto demand continues.
• Whether FY27/FY28 segment margins progress toward 26.7% and 31.3%.