Bernstein Boosts Infineon Target Price, Shares Surge on AI-Driven Power Semiconductor Growth

Infineon Technologies AG IFXGn saw its shares jump 5% after Bernstein lifted its price target to €102 from €74, underscoring Infineon's dominant role in the power semiconductor sector amid surging AI data center demands.

Bernstein maintained an "outperform" stance, upping its target multiple from 25x to 30x in response to strong pricing momentum. The firm's analysts noted that power semiconductors account for over half of Infineon's revenue, reinforcing its key market position.

The chipmaker's grip in the power discrete segment is about 15%, with AI power semis capturing over 40%, and auto power at 24%. Notably, Infineon's AI exposure through GPU and CPU server sales is pegged at 13% for 2026, expected to climb to 22% by 2028, a figure Bernstein claims is underestimated by many investors.

Projected earnings growth is noticeably robust. Adjusted diluted EPS is forecast to expand at a 42% CAGR between 2025 and 2028, with figures revised upward to €1.74 for 2026 and €2.94 in 2027, outpacing earlier projections.

Bernstein's revenue outlook for FY27 and FY28 also rose by 3.4% and 7.1%, respectively. The slight tweak for FY26 ties back to a limited pricing impact during the current fiscal year, with most gains driven by elevated pricing for power components in automotive, green industrial power, and sensor system segments.

The CPU data center segment is under the spotlight, where Infineon is expected to post a 30% CAGR in revenue over the next three years. This part of the business alone is estimated to generate €1.1 billion by 2028, up from €500 million this year.

On operational efficiency, Bernstein anticipates segment margins climbing from 17.5% in 2025 to just under 30% in 2028, supported by a product mix tilt towards AI applications and shifting resources from lower-tier automotive IGBTs.

Manufacturing capacity sets Infineon apart too. With 850,000 wafer starts per month projected for 2025, their capacity dwarfs competitors like Silan, the number two player. Plans are in place to ramp up capacity by 10% annually over the next couple of years, topping the million wafer starts mark by 2027, exceeding the overall power semiconductor market growth rate.

Notably, the company's Smart Power Fab in Dresden is slated to begin operations in July 2026, and recently, Infineon accelerated its capital expenditures by €500 million, pushing FY26 capex to €2.7 billion.

Bernstein did outline potential risks, including weaker automotive demand, delayed recovery timelines, falling prices and oversupply risks in silicon carbide products, broad semiconductor downturns, and multiple compression.