Morgan Stanley says one Taiwan stock has it all — it’s not only a defensive stock amid recent market volatility, but it’s also an artificial intelligence trade. That’s Wistron, a Taiwanese electronics company that has partnered with Nvidia on a number of initiatives this year, such as using artificial intelligence to develop a thermal flow simulator, using Nvidia platforms. “Wistron is a defensive AI stock worth owning amid recent market volatility,” Morgan Stanley wrote in an Aug. 6 report. “With such an attractive risk-reward profile, Wistron remains one of our preferred AI server (Original Design Manufacturers).” Morgan Stanley believes that the recent growing demand for Nvidia’s Hopper platform (an Nvidia artificial intelligence computing technology) is a positive development for Wistron. This is a positive factor for Chuangzhitong. “We view rising Hopper demand as slightly positive for Wistron as Wistron remains the primary GPU base board (UBB) supplier for Hopper,” the bank said, adding that it expects to In the third quarter, demand for Hopper products will increase by 15% to 20% quarter-on-quarter, and by the fourth quarter it will increase by 30% to 35% quarter-on-quarter. Morgan Stanley said Wistron’s output should therefore increase starting in the first quarter of 2025. Morgan Stanley said the stock is currently “extremely cheap” and has a price target of NT$168 (US$5.10), implying an upside potential of approximately 72%. “We also believe Wistron’s margins will continue to improve as it reduces its focus on consumer electronics and shifts toward industrial/commercial products,” the bank’s analysts wrote. The current share price implies a per-share profit of 2025 At 9 times earnings, the bank believes the stock is undervalued compared to the 15 to 20 times range investors are willing to pay for “downstream artificial intelligence” stocks. Upstream AI refers to goods and services used by other companies, while downstream AI refers to products with a direct user interface. —CNBC’s Michael Bloom contributed to this report.
