Amkor Technology Stock Upgraded by UBS After $1.5 Billion Nvidia Deal

Amkor’s $1.5 Billion Nvidia Strategic Partnership

Amkor Technology, a specialist in semiconductor packaging and testing, has secured a significant expansion of its multiyear partnership with Nvidia. The deal, which includes a cash prepayment, is valued at $1.5 billion. This agreement is expected to bolster Amkor’s involvement in the production of Nvidia’s upcoming hardware, including the Vera central processing unit (CPU), the GB10, the N1X, and future product lines that may extend to the Rosa architecture.

“We view the US$1.5bn NVIDIA strategic partnership supporting Amkor’s on-going ramp of [Nvidia’s] Vera [central processing unit (CPU)] (we estimate 60% share), GB10 and N1X and future products (likely extending to Rosa).”

Randy Abrams, Analyst at UBS

UBS Upgrades Amkor Shares Amidst AI Demand

Following the news of the Nvidia deal, UBS upgraded Amkor Technology’s stock from neutral to buy. This optimism arrives as Amkor continues to benefit from the broader artificial intelligence boom; the company’s stock has already climbed 68% year to date.

Analysts at UBS project that the expanded packaging business will contribute $1.1 billion in additional sales to Amkor’s top line by 2027. This growth is underpinned by a stronger outlook for [Amkor’s] advanced packaging business driven off rising server CPU volumes and good support from growth in the base business, tighter capacity and price hikes to pass through inflationary costs, according to the note shared by Randy Abrams.

Market Positioning and Semiconductor Sector Trends

Amkor’s deal with Nvidia is not its only major recent move. Earlier this summer, the company finalized a 10-year agreement with Taiwan Semiconductor Manufacturing Company (TSMC). Furthermore, UBS noted that Amkor is well-positioned to pull-in and accelerate 2nd source business for AMD’s Venice CPU where demand is upsiding. Despite these developments, market sentiment remains divided; according to LSEG data, only four of the 12 analysts covering the stock currently hold a buy rating.

Meanwhile, the broader semiconductor industry faces a period of volatility. While some names like Marvell Technology have experienced a decline—dropping 40% from peak levels—analysts remain focused on the potential for recovery in custom silicon. UBS has also highlighted Marvell’s CXL (Compute Express Link) business, which has a total addressable market estimated at $4.5 billion by year-end, with the potential to reach $10 billion by 2030. UBS has set a $340 price target on Marvell, suggesting that investors are closely watching how individual firms navigate the current semiconductor landscape.