On Friday at 3:00 PM (Bangkok time), the share price of Delta Electronics (Thailand) Public Company Limited (SET: DELTA) rose by 2.75% or THB 7.00 to THB 262.00, with a trading value of THB 6.21 billion.
Kasikorn Securities (KS) wrote that U.S. President Donald Trump and Chinese President Xi Jinping have held discussions on artificial intelligence for the first time. The former expressed support for unrestricted development to maintain America’s competitive edge, while the latter favored setting boundaries, reiterating that AI must remain under human control.
Although both parties remain at odds over chip export restrictions, they have started to explore joint risk management mechanisms and agreed to extend the trade truce until January 10, 2027. This development is seen as a positive sentiment for DELTA and companies in the industrial estate and power plant sectors that benefit from AI and data center investments, should tensions over chips and trade between the U.S. and China ease.
Kasikorn retains a ‘Buy’ recommendation for DELTA, with a target price of THB 300 per share. The company’s valuation has become more attractive after a recent correction, currently trading at approximately 63x price-to-earnings, well below the target of 92x. This correction is viewed as a short-term reset, while AI demand remains robust, driven by increased capital expenditure from hyperscalers and higher demand for power and cooling systems per rack.
The company’s gross margins and profits are expected to recover in the second half of the year as pressures from chip costs, inventory, and product mix ease. DELTA’s normalized profit is projected to achieve a CAGR of around 32% from 2026 to 2028.
Bualuang Securities (BLS) emphasized that DELTA’s growth outlook related to AI and data centers has strengthened following Morgan Stanley’s revisions to power assumptions, with the Vera Rubin rack raised to 234kW from 149kW and Rubin Ultra to 600kW from 415kW. This indicates that increased power demand is driven not only by GPUs but also by memory, network, power supply, and cooling systems.
Morgan Stanley now forecasts global server/rack power demand between 2026 and 2028 to be 18GW, 35GW, and 52GW, compared to Bualuang’s own forecasts of 15GW, 20GW, and 25GW, respectively. Even after accounting for power constraints in the U.S., the annual global installation rate could reach 28GW per year, exceeding prior estimates.
For DELTA, higher rack power usage supports increased value for power distribution and cooling systems per rack. Morgan Stanley also raised its liquid cooling investment assumption by 30% and regards cooling as increasingly critical infrastructure. The adoption of 800VDC architecture is expected to boost system efficiency by about 5%, reduce copper usage by roughly 45%, and support racks with more than 1MW power consumption, in line with DELTA’s opportunity to add value as installed capacity expands.
In the short term, the supply chain constraints are expected to gradually ease in the third quarter of 2026. Power electronics sales in July at Delta Taiwan surged 59% year-on-year and 17% month-on-month before dipping 9% month-on-month in August. However, the figures were still 40% higher than the previous year and above levels from March to June. Bualuang forecasts DELTA’s 3Q26 sales at $2.2 billion (+34% year-on-year, +10% quarter-on-quarter), with a gross margin of 29.2% and core profit of THB 9 billion (+21% year-on-year, +60% quarter-on-quarter), with prospects of new record highs in 4Q26 due to backlog deliveries.
The recommendation remains ‘Buy’ with a target price of THB 330 per share, with the electronic sector weighting maintained in line with the market, as rising rack power usage expands opportunities in both power and cooling, while easing supply constraints provide profit tailwinds in the latter half of 2026.
Kiatnakin Phatra Securities (KKPS) projects that DELTA will achieve a record-high pre-exceptional profit of THB 10 billion for 3Q26, representing a 58% year-on-year and 82% quarter-on-quarter increase. This forecast is 15% above the consensus estimate and is supported by a recovery in gross margin to 31% from 26.8% in 2025, alongside strong revenue growth expected to expand by 47% year-on-year and 20% quarter-on-quarter. Additionally, the royalty fee-to-sales ratio is anticipated to normalize to 7.8%.
KKPS views 3Q26 as the start of a new bullish cycle for DELTA following the period impacted by high raw material costs. While raw material prices are likely to remain elevated, the analyst believes the impacts will be more manageable. Price negotiations with customers are ongoing, with clearer benefits from price increases expected to materialize in early 2027.
As delivery of previously delayed orders is still underway, the brokerage anticipates even stronger revenues in 4Q26. The commencement of mass production for liquid cooling and Vera Rubin-related products is expected to drive additional growth momentum through 4Q26 and into 2027.
Following these, KKPS rates DELTA with a ‘Buy’ recommendation and sets a target price of THB 340 per share, highlighting the company as a key beneficiary of the ongoing AI investment cycle.
