Jefferies has identified a little-known and potentially undervalued Taiwanese company poised to capitalize on the growing field of artificial intelligence. Insyde Software, listed on the Taipei Exchange, is well-positioned to benefit from growing demand for AI-powered personal computers and servers, the investment bank said. Investors can usually trade stocks listed in Taiwan through international brokers such as Interactive Brokers. Jefferies initiated Insyde coverage on July 9 with a research note titled “Firmware Leader and Yet-to-be-Explored AI Play” with a “Buy” rating and a price target of a potential 42% upside from current levels. Recommends an increase. However, the stock has already gained more than 30% since the rating action, according to FactSet data, which shows that the stock currently offers a 17% upside potential. FactSet data suggests the stock is up 101% in 2024, and has risen more than 1,500% over the past five years. Founded in 1998, Insyde has established itself in the firmware industry, capturing more than 50% market share in the personal computer segment, Jefferies suggests. Firmware is software embedded in hardware, which enables high-level software—such as an operating system such as Microsoft Windows or Linux—to interact with hardware components. Insyde's success stems from its early adoption of Unified Extensible Firmware Interface (UEFI) technology, which has largely replaced legacy Basic Input/Output System (BIOS) systems. According to Jefferies, the company's “tight partnerships with top chip designers” such as Nvidia, Arm, Qualcomm, Intel, and Taiwan-headquartered ASPEED, as well as leading original equipment manufacturers such as Dell and HP, have made it successful. Helped to be. “Among the growing AI PC/servers globally, Insyde is well-positioned to capture the significant AI tailwind, driving 20%. [compounded annual sales growth estimate until 2030]Jefferies analysts led by Matt Ma said in a July 9 note to clients. However, Jefferies added that despite the company's long history in the technology and multiple contributions, the stock “is likely to have limited sell-side coverage. The investment bank expects the personal computer BIOS sector as a whole to It will grow at a compound annual growth rate of 14 percent from 2023 to 2030. The company charges a fee for each device using its firmware, which increases client shipments, a model that gives Insyde gross margins. has allowed it to maintain more than 70% and consistently improve net margins, as reflected in the company's revenue over the past decade – CNBC's Michael Bloom contributed reporting.
