BofA raises ASE Technology stock price target on strong results

BofA Securities upgraded its price target for ASE Technology Holding Co. (NYSE:ASX) to $58, up from $51, while keeping a Buy rating on the stock. This implies a potential 22% gain from the current price of $47.53, as shares have been nearing their 52-week high after surging 308% over the past year. The firm highlighted ASE's strong third-quarter 2026 performance, with sales rising 28% quarter-over-quarter and surpassing expectations.

This growth was fueled by IC ATM revenue increasing 20% quarter-over-quarter, exceeding BofA's forecast of 13%, and EMS revenue climbing 42% quarter-over-quarter, surpassing the 40% projection. BofA attributes the IC ATM strength to modest packaging and testing price hikes due to supply constraints, along with a rise in LEAP business.

EMS also enjoyed a boost from Apple product seasonal builds and higher component costs being passed on. The analysts anticipate IC ATM gross margins to improve by 300 basis points to 30% within the quarter, surpassing the company's high-20% guidance, thanks to better utilization of packaging and testing, higher average selling prices, and increased LEAP mix.

Overall gross margins are projected to climb 180 basis points to 23%, although this could be partially offset by EMS expansion. Despite trading above its Fair Value, ASX remains a key player in the Semiconductors & Semiconductor Equipment sector. Investors can access 15 extra InvestingPro Tips and detailed Pro Research Reports on ASX and over 1,400 other US equities for actionable insights.