Asus (2357): Goldman Sachs lifts Asus estimates and target price as AI server racks and richer PC mix support growth, while maintaining Neutral.

Overview

Goldman Sachs reviews Asus after its August revenue beat and raises forecasts on stronger AI server-rack momentum and a more favorable PC product mix. The institution remains Neutral, viewing the valuation as fair despite a higher target price.

Core views

Goldman Sachs expects Asus's September revenue to reach NT$98bn, up 19% year on year and 4% month on month. It forecasts 3Q26 revenue of NT$277.5bn, up 8% quarter on quarter and 39% year on year, followed by 4Q26 revenue of NT$258.7bn, down 7% sequentially but still up 27% year on year. The expected fourth-quarter sequential decline reflects PC demand being pulled forward amid high memory costs and an AI-server model transition. The report's central growth thesis is that expansion into AI server racks, together with a higher-value PC product mix and rising selling prices under elevated memory costs, should support growth into late 2026 and early 2027. Goldman Sachs expects new AI-server models with higher average selling prices to add to the contribution. It also highlights Asus's capacity-expansion and diversification commitment, supported by US$0.5bn of convertible bonds and US$1bn of exchangeable bonds. After incorporating August revenue, Goldman Sachs raises 2026E, 2027E and 2028E revenue estimates by 4% each. Net-income estimates are lifted by 4%, 7% and 4%, respectively, principally because of higher revenue assumptions. The revised forecasts put 2026E revenue at NT$1,002.2bn and net income at NT$56.8bn; 2027E revenue at NT$1,090.4bn and net income at NT$56.2bn; and 2028E revenue at NT$1,193.9bn and net income at NT$64.6bn. For valuation, Goldman Sachs continues to use near-term P/E, applying 14.8x 2027E EPS versus 15.7x previously. The revised multiple is derived from peers' average relationship between 2027E P/E, 2028E net-income growth and operating margin. Combining the higher earnings estimates with the lower target multiple raises the 12-month target price slightly to NT$1,115 from NT$1,109. The institution maintains Neutral, stating that valuation is fair; it identifies EPS growth and operating margin as major share-performance factors.

Analysis framework

Goldman Sachs starts with monthly revenue trends and its September and quarterly revenue forecasts, then links the outlook to PC demand timing, AI-server model transitions, product mix and selling prices. It incorporates the August revenue result into 2026-28 earnings revisions and derives its target price from a peer-referenced near-term P/E framework using projected earnings growth and operating margins.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Near-term P/E valuation benchmarked against peers' relationship between 2027E P/E, 2028E net-income growth and operating margin.

  The report applies a 14.8x multiple to 2027E EPS to set the 12-month target price. The chosen multiple is informed by comparable brand makers' growth and profitability characteristics.

• Industry AnalysisVolume-price decomposition

  Revenue growth is assessed through product mix, higher average selling prices and shipment-related AI-server ramp-up.

  The report attributes stronger revenue assumptions to a mix of AI server-rack expansion, upgraded PC mix and higher selling prices under high memory costs.

Asset mapping & comparison

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

• Asus (2357.TW)

  Primary covered company; expected to benefit from AI server-rack ramp-up, higher-ASP new models and improved PC product mix.

  Strengths

  Robust AI-server growth momentum, PC mix upgrades, higher selling prices and financing to support capacity expansion and diversification.

  Weaknesses

  A 4Q26 sequential revenue decline is expected amid PC-demand pull-forward and an AI-server model transition.

  Comparison

  Its 14.8x 2027E P/E target multiple is derived from peer brand makers' average relationship between valuation, 2028E net-income growth and operating margin.

  Risks

  PC-market growth, AI and gaming-PC demand, and the pace of AI-server ramp-up may be stronger or weaker than expected.

Key data

• September 2026E revenueNT$98bnExpected to rise 19% year on year and 4% month on month.
• 3Q26E revenueNT$277,472mExpected to increase 8% quarter on quarter and 39% year on year.
• 4Q26E revenueNT$258,660mExpected to decline 7% quarter on quarter while growing 27% year on year.
• 2026-28E revenue revisions+4% / +4% / +4%Raised on robust AI-server growth and PC product-mix upgrades.
• 2026-28E net-income revisions+4% / +7% / +4%Primarily driven by higher revenue forecasts.
• Target valuation14.8x 2027E P/EReduced from 15.7x previously; target price rises to NT$1,115 from NT$1,109.

Impact & implications

The report argues that AI-server rack expansion and PC mix improvement can sustain strong year-on-year growth even as quarterly revenue moderates in 4Q26. Higher earnings forecasts support the increased target price, but Goldman Sachs does not see sufficient valuation support to move beyond Neutral.

Risks

• PC market growth may be stronger or weaker than Goldman Sachs expects.
• AI and gaming-PC growth may be faster or slower than expected.
• The AI-server ramp-up may proceed faster or slower than expected.

What to watch

• September revenue delivery against the NT$98bn forecast.
• The pace of AI server-rack ramp-up and adoption of higher-ASP new models.
• PC demand trends under high memory costs and the effect on product mix and selling prices.
• EPS growth and operating-margin development, which Goldman Sachs identifies as key share-performance factors.