Delta Electronics Inc. has solidified its position as a global leader in power electronics and thermal management throughout 2025. Driven by the explosive demand for Artificial Intelligence (AI) data centers and high-efficiency energy solutions, the company has seen its market capitalization climb to the top tier of the Taiwan Stock Exchange. This white paper analyzes the core drivers of Delta’s 2025 performance and evaluates the risk-reward profile for investors entering the stock in 2026.
Table of Contents
I. 2025 Financial Performance Summary
In 2025, Delta Electronics experienced a year of record-breaking growth, largely decoupled from the broader slowdown in the consumer electronics and automotive electric vehicle (EV) sectors. Key financial highlights include:
- Revenue Growth: Consolidated sales revenues for the first seven months of 2025 reached NT$288,352 million, a 24.2% increase year-over-year. By October 2025, the company reported record-high monthly revenue of NT$57.4 billion.
- Profitability: Third-quarter net profits in 2025 surged by 51% year-over-year to NT$18.6 billion, fueled by high-margin AI server power supplies and liquid cooling solutions.
- Earnings Per Share (EPS): Analyst estimates project a full-year 2025 EPS of approximately NT$19.20 to NT$21.00, representing a significant jump from 2024 levels.
- Dividend Yield: Delta maintained a stable dividend policy, paying out NT$7.00 per share in mid-2025, yielding approximately 0.8% to 1.5% depending on the entry price point.
II. Strategic Growth Drivers
1. The AI Infrastructure Boom
AI-related products have become the primary engine of Delta’s valuation. In 2025, the company successfully transitioned from providing standard power components to offering integrated “total solutions” for AI data centers. This includes ultra-high wattage power supplies (above 2000W) and advanced cooling technologies necessary for high-density GPU clusters.
2. Thermal Management and Liquid Cooling
As AI chips push the limits of traditional air cooling, Delta’s Liquid-to-Air and Liquid-to-Liquid cooling systems have seen rapid adoption. Analysts forecast that AI-related components will account for over 34% of total revenue by 2026, up from roughly 22% in 2025.
3. Diversification and Resilience
While the EV segment faced a global slowdown in 2025, Delta’s broad portfolio—including industrial automation, building automation, and ICT infrastructure—provided a safety net. The company’s global manufacturing footprint has also mitigated risks associated with US-China trade tensions and potential tariffs.
III. Stock Performance and Valuation
The TWSE: 2308 ticker reached historic highs in late 2025, surpassing NT$1,000 per share for the first time. As of December 2025, the stock has rallied over 120% year-to-date, outperforming the broader market significantly. However, this rally has pushed the Price-to-Earnings (P/E) ratio to approximately 46x, which is high compared to historical averages but reflects its transition into a high-growth AI infrastructure play.
IV. 2026 Investment Analysis: The “Buy” Case
For investors considering a position in 2026, the following factors support a bullish outlook:
- Earnings Momentum: Earnings are forecast to grow by roughly 23% to 26% annually through 2026. The continued rollout of next-generation AI chips will necessitate even more sophisticated power and cooling solutions that only a few players, like Delta, can provide at scale.
- Market Share Gains: Delta is gaining share from competitors due to its deep R&D and established relationships with hyperscalers (Microsoft, Google, Amazon).
- Institutional Sentiment: Fund ownership remains strong, with institutional investors increasing portfolio weights throughout the latter half of 2025.
V. Risks and Considerations
Despite the strong momentum, 2026 carries specific risks:
- Valuation Compression: If AI infrastructure spending slows or if Delta fails to meet aggressive earnings targets, the stock may face a valuation de-rating.
- Geopolitical Headwinds: With over 35% of revenue linked to the US market, shifts in trade policy or increased tariffs remain a persistent threat to margins.
- EV Recovery Timing: A continued slump in the global EV market could drag on the “Mobility” segment, offsetting some of the gains from the AI division.
Conclusion
Delta Electronics (TWSE: 2308) has successfully reinvented itself as a cornerstone of the AI economy in 2025. While the stock’s valuation is no longer “cheap,” its dominant position in the mission-critical power and cooling niche provides a compelling growth narrative for 2026. Long-term investors may find value in the stock’s high Return on Equity (ROE), which is forecast to remain above 22% over the next three years.