MediaTek 2Q26 Revenue Exceeds Expectations, Bernstein Reaffirms Outperform

Overview

This report is a Bernstein Quick Take on MediaTek Inc. The key event is MediaTek's 2Q26 revenue performance, with revenue reaching NT$152B, above both consensus expectations and the high end of company guidance. While acknowledging ongoing pressure on smartphone end-demand, the report highlights upside potential from expanding AI ASIC and TPU deployment and reiterates an Outperform rating.

Core views

Bernstein's core view is that MediaTek's short-term revenue quality was stronger than expected and the beat was not explained solely by FX. Over the medium term, ASIC growth and deeper TPU collaboration with Google could increase wallet share and imply upside to the 2028 forecast; smartphone business remains pressured by higher memory prices, margin-driven price increases, and inventory, but AI ASIC/TPU growth is considered sufficient to offset this weakness.

Analysis framework

The report combines event commentary with fundamental forecasting: first, it decomposes June sales and 2Q26 revenue against guidance, consensus, and FX impact, then combines supply-chain and competitive checks, TPU deployment trends, and smartphone end-demand tracking to assess segment-level impact, and finally uses a P/E valuation framework to set a 12-month target price.

Methodology notes

• Valuation methodsP/E valuation method

  22x forward P/E multiple

  Bernstein applies a 22x P/E multiple to forward Q5-Q8 EPS estimates of NT$199, resulting in a one-year target price of NT$4,380.

• RatingBernstein equity rating framework

  Outperform

  Bernstein's Outperform indicates the stock is expected to outperform its relevant market index by more than 15 percentage points over a 12-month horizon.

• Operating analysisRevenue beat decomposition

  Comparison of guidance, consensus, and FX tailwind

  The report compares 2Q26 revenue with the high end of guidance, consensus expectations, and FX tailwind to determine that the beat is not solely from FX.

Asset mapping & comparison

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

• MediaTek Inc (2454.TT) shares

  Research coverage; Bernstein assigns Outperform and sets a target price of NT$4,380.

  Strengths

  2Q26 revenue beat; fast AI ASIC revenue growth; expanding TPU deployment; deepening relationship with Google; valuation attractiveness improved after the recent pullback.

  Weaknesses

  Smartphone business remains under pressure; high memory prices harming terminal demand; elevated OEM inventory; cost inflation forcing price hikes across multiple product lines.

  Comparison

  Compared with consensus and company guidance, 2Q26 revenue was stronger; benchmark is the Asia ex-Japan large- and mid-cap index.

  Risks

  Intensifying Qualcomm competition in 5G, slower 5G adoption, weaker global smartphone demand, slower-than-expected diversification outside smartphones, and a broad semiconductor downturn.

Key data

• June salesNT$58BUp 22% sequentially and 3% year-over-year.
• 2Q26 revenueNT$152BUp 2% sequentially and 1% year-over-year; about 5% above consensus and about 2% above guidance high-end.
• FX impactAbout 1.3 percentage points tailwindThe report states FX does not fully explain the revenue beat.
• ASIC revenue outlook2026E US$2B; 2027E US$15B; 2028E US$22BRecent color checks show a more favorable competitive backdrop, and expanding TPU deployment introduces upside risk to the 2028 estimate.
• Target priceNT$4,380.00Based on 22x P/E and forward Q5-Q8 EPS estimate of NT$199.
• CloseNT$3,925.00As of July 9, 2026; implied upside 12%.
• Market capTWD 6,295.29BDisclosed in the report table.
• F26E adjusted P/E56.5xDisclosed in valuation metric table.
• F27E adjusted P/E23.0xDisclosed in valuation metric table.

Impact & implications

For investors, the report strengthens the case for MediaTek's shift in growth narrative from traditional smartphone chips toward AI ASIC/TPU-related growth. If deeper cooperation with Google and expanding TPU deployment are delivered, it could support higher revenue and valuation; however, if smartphone demand weakens or the semiconductor cycle turns down, near-term earnings and valuation may still come under pressure.

Risks

• Competitive pressure from Qualcomm is increasing in the 5G market.
• 5G adoption is progressing more slowly, especially in China.
• Global smartphone demand is weaker than expected.
• Diversification outside smartphones is progressing more slowly than expected.
• The broad semiconductor market is entering a down cycle.
• High memory prices and OEM price hikes may damage demand and add inventory pressure.

What to watch

• Whether subsequent monthly sales can sustain the 2Q26 outperformance trend.
• Whether ASIC revenue can follow the US$2B, US$15B, and US$22B path in 2026-2028.
• Visibility into TPU deployment expansion and deeper MediaTek-Google collaboration.
• Sales reaction after smartphone end-demand, channel inventory, and OEM price hikes.
• Whether operating margin can be supported by price increases without materially impairing terminal demand.
• Qualcomm's competitive position and changes in 5G market share.