Amkor Technology (NASDAQ:AMKR) shares rose more than 2% pre-market today after Melius analysts raised their price target on the company to $55 from $41 while maintaining their Buy rating.
The analysts emphasized Amkor’s strong position in the semiconductor industry, noting its leadership in packaging and test services (OSAT). Despite a 32% rise this year, they believe Amkor's growth is just beginning. Amkor's top customer, Apple, accounts for over 25% of its sales, and increased iPhone 16 builds are expected to drive a multi-year supercycle with double-digit unit growth.
Additionally, Amkor is set to benefit from new Apple headphones and increased packaging revenue for AI chips from major players like Nvidia. Given the positive outlook for both Apple and Nvidia, the analysts raised their estimates for Amkor through 2026. They anticipate EPS approaching $4 with peak gross margins exceeding 20% within two years, leading to the new price target of $55.