Bernstein analysts have identified two promising European semiconductor stocks for 2025, despite concerns about the sector’s outlook. The investment bank expects China demand to drive wafer fab equipment growth but sees a flat-ish 2025 and a return to growth in 2026.
Two stocks stand out: BE Semiconductors and Infineon Technologies. Bernstein rates BE Semiconductors as its top pick, with a target price of 135 euros ($140), offering around 0.03% upside potential. Despite a “tough run” this year due to delays in hybrid bonding adoption and lack of recovery in mainstream assembly business, the analysts remain confident that strong growth is possible.
Infineon Technologies is another top pick, with a target price of 36 euros ($36). Bernstein analysts see indicators pointing to the end of the cycle’s downturn, increasing the likelihood of a strong re-rating. The company’s secular growth drivers, including powering AI datacenters, are expected to drive significant revenue growth, surpassing 500 million euros in 2025 and exceeding a billion euros within two years.
Both stocks offer attractive fundamental stories, with patience required to see Besi realize strong growth from cyclical recovery and hybrid bonding. However, Bernstein remains confident that both companies will contribute to growth as we look towards 2026 and beyond.
Source: https://www.cnbc.com/2024/12/26/bernstein-names-2-top-european-semiconductor-stock-picks-for-2025.html