J.P. Morgan | Delta Electronics (2308.TW): Supply-Driven 3Q26 Revenue Miss, Sharp 4Q26 Catch-Up Expected; Overweight
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Delta Electronics posted 3Q26 revenue of NT$197 billion, up 31% year on year and 8% quarter on quarter, but 8% below J.P. Morgan's estimate and 5% below consensus. The miss was driven mainly by the power electronics segment, which grew only 11% sequentially as power semiconductor supply constraints and PSU capacitor issues limited shipments. J.P. Morgan characterizes the shortfall as supply-driven rather than demand-driven: as component availability improves, it expects a revenue catch-up in 4Q26, supported by ramping 18.5kW PSU volumes, HVDC rack shipments and a more significant contribution from pass-through pricing. Server power momentum should reaccelerate in 4Q26, with further sequential growth in server power revenue expected in 1Q27 as AI-related demand stays intact. The recent share price pullback on patent investigation concerns is seen as having limited fundamental impact. J.P. Morgan maintains an Overweight rating on the stock with a target price of NT$2,500.