Accton 2Q26 earnings beat, 3Q26 strength driven by AWS T3 cycle; OW

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

07 August 2026

Accton

2Q26 earnings beat, 3Q26 strength driven by AWS

T3 cycle; OW

Overweight

2345.TW, 2345 TT

Price (06 Aug 26):NT$2,410.00

▲Price Target (Jun-27):NT$3,700.00

Prior (Jun-27):NT$3,600.00

Key takeaways from Accton’s 2Q26 earnings were: 1) 2Q26 GMs came in better

than recently-lowered expectations, and earnings beat on revenue upside; 2) 3Q

revenue likely to grow 25%+ QoQ with AWS T3 ramp and continued networking

strength, in our view; 3) Increasing GMs pressure from AWS ramp and raw

material cost hike, but OPM likely to stay resilient with better scale, in our view;

4) Aggressive capacity planning with expansion across Vietnam, Taiwan,

Malaysia, and the U.S.; and 5) Multiple new projects in the pipeline, with a bigger

server assembly contribution next year. Accton’s stock has outperformed the Taiex

by ~50% YTD and remained resilient during the recent market correction. We

believe market expectations on AWS T3 supply chain remain undemanding and

anticipate the stock to ride on T3 ramp up in 2H26. Besides, Accton has been

gaining faster-than-expected traction in its datacenter networking business, with a

second CSP contributing almost 20% of revenue now. We raise our 2026/27E

earnings by 10%/6% and increase Jun-27 PT to NT$3700, based on 26x 12m fwd

EPS, at the higher end of historical up-cycle valuations, given the accelerating

datacenter whitebox switch upgrade cycle, secular AI demand, and potential rerating opportunity from the optical biz. Stay OW.

2Q26 earnings beat on networking and ASIC module strength. Accton’s

2Q26 GMs came in slightly below our estimates at 19.7%, while OPM was

largely in line with market expectations at 15%, helped by positive OP

leverage. Bottom line was 11% higher than our estimates, driven by strongerthan-expected revenue due to strong datacenter networking demand, m/s gain

in Meta’s 800G project, and AWS T3 ramp. Looking ahead, we expect

sustained revenue momentum in 2H26 driven by continued AWS T3 ramp and

robust datacenter networking demand. Although we are likely to see continued

margin pressure in 2H26 due to raw material price hikes and higher revenue

…