Delta Electronics(2308) falls below 950 yuan: Investment considerations — fundamentals are strong, but short-term caution is needed

AI Power Revolution is About to Launch, Delta Electronics Enjoys Industry Tailwinds

The leading power management company Delta Electronics (2308) has recently experienced significant stock price volatility. This week, as the Taiwan stock market rebounded, the stock briefly surged 4.39% intraday, reclaiming the 950 NT dollar level, but then softened afterward. On the 27th, it fell 0.32%, and today it failed to hold the 950 NT dollar support, closing at 932 NT dollars, down 1.06%.

Behind the seemingly short-term pressure, there are hidden opportunities amid industry upheaval. A recent report from foreign research institutions indicates that NVIDIA’s Rubin GPU series, expected to launch in the second half of 2026, will adopt groundbreaking microchannel cover cooling technology. Its dual-chip version has a thermal design power (TDP) of up to 2,300 watts, posing unprecedented challenges for cooling solutions.

Even more impactful is the sharp increase in power consumption of AI server racks. The current GB series consumes 130 kW, while Vera Rubin will jump to 220 kW, and future Rubin Ultra is projected to reach 600 kW. This level of power consumption growth will fundamentally reshape the technological roadmap of global power supply infrastructure.

As a result, Delta Electronics and Lite-On Technology are being identified by the market as the biggest beneficiaries. The group’s capital expenditure this year will reach 40 billion NT dollars, maintaining the same scale next year, with a record-high investment ratio in equipment and automation at 65%. Capacity expansion in Thailand, Taiwan, and the US is progressing rapidly, focusing on two core product lines: AI server power supplies and liquid cooling solutions.

Institutional analysts estimate that Delta Electronics’ EPS this year could reach 23.8 NT dollars, rising to 33 NT dollars next year driven by increased shipments of AI-related products, representing a 38.7% annual growth rate. Such profit engines provide strong support for long-term investors.

Losing the 950 NT Dollar Level, Technical Warning Signals

From a technical perspective, Delta Electronics has entered a correction phase since its all-time high of 1085 NT dollars. Although it has recently regained the short-term moving averages such as the 5-day, 10-day, and quarterly lines, the monthly line still presents significant resistance.

The stock has already more than doubled this year, and the recent 20% correction is a typical technical adjustment. However, the current valuation is relatively high, and losing the 950 NT dollar level is a warning sign—short-term stock prices have fully priced in positive news, and the psychological barrier of 1,000 NT dollars has become difficult to surpass.

Most analysts believe that cautious investors should avoid chasing prices at this moment. The profit potential is relatively limited, and the risk of chasing higher clearly outweighs the benefits.

New Options Regulations and North American Expansion, Medium-Long Term Outlook

On December 8, the Taiwan Futures Exchange will implement adjustments to electronic options contracts, reducing the contract multiplier from 1,000 NT dollars per point to 250 NT dollars, and decreasing the contract value from approximately 1.6 million NT dollars to 400,000 NT dollars. This reform will effectively lower trading barriers and invigorate the electronic derivatives market.

As one of the top five market-cap stocks in the electronics sector, Delta Electronics accounts for nearly 70% of the total market value of electronics stocks, along with TSMC, Hon Hai, MediaTek, and Quanta. After losing the 950 NT dollar level, the stock’s volatility will directly impact the electronics index and generate leverage effects through derivatives.

Looking at industry structure, electronics stocks have long accounted for over 70% of Taiwan’s stock market turnover. Driven by the booming AI and semiconductor industries, the electronics index has continued to outperform the weighted index. Delta Electronics, with its dual themes of AI power supplies and cooling solutions, holds a strategic position in this trend.

It is worth noting that Delta’s US subsidiary has signed a lease for a large building in Plano, Texas, covering 226,000 square feet (about 6,300 ping), with a 7.5-year lease term, scheduled to start operations in April 2026. This move continues last year’s Texas FWT laboratory construction plan, demonstrating the group’s strong push into the North American market.

Investment Strategy: Short-term Caution, Medium-Long Term Monitoring

Current investment considerations should be as follows:

Short-term attitude: Since the 950 NT dollar level has been lost and the price approaches 1,000 NT dollars, profit potential is limited. Large-scale buying is not recommended. It is advisable to stay on the sidelines in the short term.

Medium-Long Term Planning: Focus on the upgrade of AI infrastructure, with the launch schedule of NVIDIA’s new platform in 2026 being a key indicator. Closely monitor the progress of Delta’s new capacity in Thailand and the US, revenue contributions from liquid cooling products, and trends in gross margin and operating profit margin.

Key risk indicators: Pay attention to changes in market liquidity following the December options reform, continuously monitor whether global AI capital expenditure shows cyclical adjustments, and observe foreign institutional holdings and the utilization rate of new US factories.

Losing the 950 NT dollar level may seem like short-term pressure, but in reality, it is a period for re-evaluation of entry points. Patience and allowing fundamentals and technicals to reach a new balance might be a more prudent investment approach.