Montage Technology shares surged over 11 percent after CLSA initiated coverage on its Hong Kong stock with a HKD 447.2 target price. The broker cited surging server CPU demand from the artificial intelligence sector's shift toward inference and agent-based applications as a primary catalyst for the chipmaker.
Montage Technology Co. (06809.HK) shares surged more than 11 percent after CLSA initiated coverage with a HKD 447.2 target price, citing booming demand for server CPUs driven by the artificial intelligence industry’s pivot to inference and agent-based computing.
"As AI shifts from model training to inference, particularly with the development of AI agents, demand for server CPUs continues to rise," CLSA said in a report. The broker named Montage as a key beneficiary of this trend, which is also fueling rallies in other global chipmakers like Advanced Micro Devices Inc.
CLSA initiated its Hong Kong-listed shares with a high-conviction “Outperform” rating. The broker also lifted its target for Montage’s A-shares (688008.SS) by 33 percent to RMB 277.9 from RMB 209.6, maintaining the same rating. Following the new coverage, CLSA raised its net profit forecasts for the chipmaker for 2026, 2027, and 2028 by 9 percent, 33 percent, and 25 percent, respectively.
The bullish call comes as Montage’s Hong Kong shares trade at a significant premium to their mainland counterparts. The stock’s 17 percent jump on Wednesday pushed its H-shares to a 40 percent premium over its Shanghai-listed stock, the widest among dual-listed companies, according to Bloomberg data. The rally reflects intense investor appetite for hardware companies enabling the AI boom, a trend that has seen data storage firm Seagate Technology gain 164 percent and AMD’s stock nearly double this year on the back of its own data center growth.
The new price target implies significant further upside for Montage. The company's next catalyst will be its upcoming earnings report, where investors will look for confirmation of accelerating growth in its data center segment.
This article is for informational purposes only and does not constitute investment advice.
