J.P. Morgan: Advantest (6857.T) – Raising Earnings Estimates on CPU CPO Demand Beyond GPU ASIC
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J.P. Morgan raised its earnings forecasts for Advantest (6857.T), citing expanding AI test demand beyond GPU ASICs into the CPU co-packaged optics (CPO) segment. This broadening demand spectrum is expected to drive incremental test equipment orders. Consequently, the firm increased its FY2026 revenue estimate from 650 billion to 680 billion yen, with operating profit moving from 180 billion to 195 billion yen. FY2027 estimates were also lifted, projecting revenue of 760 billion yen (up from 720 billion) and operating profit of 230 billion yen (up from 210 billion). J.P. Morgan maintains an Overweight rating, raising the target price from 12,000 to 13,500 yen, based on 25 times 2027 expected EPS. Revenue contributions from CPU CPO demand are anticipated to commence in the second half of 2026 and accelerate through 2027. Advantest remains strongly positioned in both SoC and memory testing. Key risks include slower CPU CPO adoption, demand deceleration for GPU ASICs, and foreign exchange fluctuations.