MediaTek Inc (聯發科) shares yesterday notched their best two-day rally on record, as investors flock to the Taiwanese chip designer on excitement over its tie-up with Google.
The Taipei-listed stock jumped 8.59 percent, capping a two-session surge of 19 percent and closing at a fresh all-time high of NT$1,770.
That extended a two-month rally on growing awareness of MediaTek’s work on Google’s tensor processing units (TPUs), which are chips used in artificial intelligence (AI) applications.
Photo: Reuters
It also highlights how fund managers faced with single-stock limits on their holding of market titan Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are diversifying into other AI-related firms. MediaTek’s pivot from its core smartphone chip business into high-margin custom AI offerings has positioned it as a top alternative.
“We see large potential” in MediaTek’s AI application-specific integrated circuits, Morgan Stanley analysts including Charlie Chan (詹家鴻) wrote in a note on Friday.
While Google is also working with Broadcom Inc on its TPUs, MediaTek might see more growth as it converts more of its smartphone-related resources to AI-related chips, the Morgan Stanley analysts added.
MediaTek helped power Taiwan’s benchmark TAIEX to a new record, along with other major tech names including chipmakers Nanya Technology Corp (南亞科), which rose 5.34 percent to close at NT$286, and United Microelectronics Corp (聯電), up 6.94 percent to NT$69.3. TSMC shares fell 0.85 percent to end at NT$1,755.
The TAIEX closed up 0.32 percent at 32,064.52 points, Taiwan Stock Exchange’s data showed.
MediaTek’s latest guidance looks conservative, as it only factors in the outlook as of October last year and just orders from Google, Morningstar Inc analyst Phelix Lee (李旭暘) said.
The market might be hoping for the company to overshoot its targets, he said.
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