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ASE Technology Rises 27% in a Month: Should You Buy the Stock?
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Key Takeaways
ASE Technology expects 2026 LEAP revenues to exceed $3.5 billion and targets doubling it in 2027.
ASX added $2 billion to 2026 CapEx as it expands LEAP capacity for strong customer demand.
CoWoS and panel packaging could add growth drivers as AI demand boosts advanced packaging needs.
ASE Technology Holding (ASX - Free Report) shares have rallied 26.9% in the past month, outperforming the Zacks Electronics - Semiconductors industry's appreciation of 8.9%. The stock has also outperformed its industry peers, including Amkor Technology (AMKR - Free Report) , GlobalFoundries (GFS - Free Report) and Synaptics (SYNA - Free Report) . In the past month, shares of Amkor Technology, GlobalFoundries and Synaptics have returned 15%, 7.8% and 21.1%, respectively.
The outperformance of ASE Technology’s shares raises the question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.
One-Month Price Return Performance
Image Source: Zacks Investment Research
Strong LEAP Momentum Bodes Well for ASX’s Prospects
ASE Technology is seeing strong demand for its leading-edge advanced packaging (LEAP) services as the growth of AI increases demand for more complex semiconductor packaging and testing. LEAP revenues are tracking ahead of the company’s earlier 2026 target of $3.5 billion. Management now expects to add another few hundred million dollars to this year's LEAP revenues and is targeting a doubling of LEAP revenues in 2027.
The company has clear visibility into customer demand and the capacity needed to support this growth. ASX plans to add facilities and equipment to expand LEAP capacity, with another $2 billion of CapEx added to its 2026 plans. Management said the company expects to continue making heavy investments in both advanced packaging and testing to support customer demand.
The growth is already showing up in ASX's results. In the second quarter of 2026, ATM revenues rose 36% year over year to TWD 126.1 billion. Higher LEAP volumes also helped lift ATM gross margin to 27.3% from 21.9% a year earlier. Management expects LEAP and test businesses to remain margin accretive and sees ATM gross margin moving above 30% in the fourth quarter of 2026.
Still, execution remains a key factor. ASX said its near-term growth is limited by how quickly it can install equipment and complete new facilities. ASX is working on 13 greenfield and eight brownfield projects. These projects are expected to provide capacity through 2028 and into part of 2029. However, managing so many projects at the same time might create execution risks, particularly around construction, equipment installation and meeting required timelines.
Nonetheless, strong AI-related demand, expanding capacity and higher-margin LEAP services give ASX a solid base for growth. Its target to double LEAP revenues in 2027 looks achievable, but timely capacity expansion and execution will be important for the company to meet that goal. The Zacks Consensus Estimate for 2026 and 2027 indicates revenue growth of around 27.9% and 22.5%, respectively.
ASE Technology is expanding its advanced packaging capabilities as AI drives demand for larger chips, higher bandwidth and more complex semiconductor designs. Rising AI demand is creating hardware requirements in terms of size, complexity and integration, making packaging an important part of the AI infrastructure buildout. ASE Technology believes that hardware infrastructure has become a key bottleneck, while packaging is moving up in the system architecture value chain.
CoWoS is one of the main technologies supporting this opportunity. The company is working to increase its CoWoS scale and efficiency as demand from AI infrastructure remains strong. ASE Technology is also expanding its full process business, which management said is on track to generate about TWD 300 million in revenues in 2026. The company expects substantial growth in this business in 2027 and sees it becoming margin accretive as it scales.
Panel-level packaging could add another growth opportunity. ASX’s fully-automated 310-by-310 panel line is expected to start production in the first quarter of 2027. Management said that the solution is complementary to foundry offerings and is aimed at a similar customer set and reticle size. Customer adoption will depend on factors such as capacity, performance and speed of execution. This gives ASE Technology another packaging option as customers look for solutions to meet rising AI hardware requirements.
If ASX can bring the new capacity online as planned, CoWoS, panel packaging and LEAP could provide multiple growth drivers as AI infrastructure demand continues to expand.
Key Technical Indicator Signals Bullish Trend for ASX
ASX shares are trading above their 50-day & 200-day moving averages, a bullish technical signal that indicates the potential for continued upward momentum in the near term.
ASX 50-Day & 200-day Simple Moving Average
Image Source: Zacks Investment Research
ASX’s Valuation Reflects High Growth Expectations
ASE Technology is currently trading at a higher price-to-earnings (P/E) multiple, significantly higher than the Zacks Electronics - Semiconductors industry. ASX’s forward 12-month P/E ratio sits at 26.32X, significantly higher than the Zacks industry’s forward 12-month P/E ratio of 14.24X.
ASX Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
ASX stock also trades at a higher P/E multiple compared with other industry peers, including Amkor Technology, GlobalFoundries and Synaptics. At present, Amkor Technology, GlobalFoundries and Synaptics have P/S multiples of 20.84X, 20.43X and 21.22X, respectively.
ASX’s rally reflects investor excitement about AI-related packaging demand, putting it above the industry and peers in terms of valuation, reflecting the high growth expectations of the company in the long term.
Conclusion: Buy ASX Stock Right Now
ASE Technology continues to benefit from strong demand for LEAP services as AI drives demand for advanced packaging and testing. Management expects LEAP revenues to grow further in 2026 and is targeting a doubling of LEAP revenues in 2027. Higher LEAP volumes are also helping improve ATM margins, while the company is adding capacity to support customer demand.
Rising demand for CoWoS, panel-level packaging and other advanced packaging services could provide additional growth opportunities as the company expands capacity. Further, the stock’s valuation reflects high growth expectations for the company, which is set to benefit from strong long-term demand for AI-driven advanced packaging, including LEAP, CoWoS and panel-level packaging.
View the Zacks #1 Rank List
Image: Bigstock
ASE Technology Rises 27% in a Month: Should You Buy the Stock?
Key Takeaways
ASE Technology Holding (ASX - Free Report) shares have rallied 26.9% in the past month, outperforming the Zacks Electronics - Semiconductors industry's appreciation of 8.9%. The stock has also outperformed its industry peers, including Amkor Technology (AMKR - Free Report) , GlobalFoundries (GFS - Free Report) and Synaptics (SYNA - Free Report) . In the past month, shares of Amkor Technology, GlobalFoundries and Synaptics have returned 15%, 7.8% and 21.1%, respectively.
The outperformance of ASE Technology’s shares raises the question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.
One-Month Price Return Performance
Image Source: Zacks Investment Research
Strong LEAP Momentum Bodes Well for ASX’s Prospects
ASE Technology is seeing strong demand for its leading-edge advanced packaging (LEAP) services as the growth of AI increases demand for more complex semiconductor packaging and testing. LEAP revenues are tracking ahead of the company’s earlier 2026 target of $3.5 billion. Management now expects to add another few hundred million dollars to this year's LEAP revenues and is targeting a doubling of LEAP revenues in 2027.
The company has clear visibility into customer demand and the capacity needed to support this growth. ASX plans to add facilities and equipment to expand LEAP capacity, with another $2 billion of CapEx added to its 2026 plans. Management said the company expects to continue making heavy investments in both advanced packaging and testing to support customer demand.
The growth is already showing up in ASX's results. In the second quarter of 2026, ATM revenues rose 36% year over year to TWD 126.1 billion. Higher LEAP volumes also helped lift ATM gross margin to 27.3% from 21.9% a year earlier. Management expects LEAP and test businesses to remain margin accretive and sees ATM gross margin moving above 30% in the fourth quarter of 2026.
Still, execution remains a key factor. ASX said its near-term growth is limited by how quickly it can install equipment and complete new facilities. ASX is working on 13 greenfield and eight brownfield projects. These projects are expected to provide capacity through 2028 and into part of 2029. However, managing so many projects at the same time might create execution risks, particularly around construction, equipment installation and meeting required timelines.
Nonetheless, strong AI-related demand, expanding capacity and higher-margin LEAP services give ASX a solid base for growth. Its target to double LEAP revenues in 2027 looks achievable, but timely capacity expansion and execution will be important for the company to meet that goal. The Zacks Consensus Estimate for 2026 and 2027 indicates revenue growth of around 27.9% and 22.5%, respectively.
Image Source: Zacks Investment Research
CoWoS & Panel Packaging Demand Boosts ASX's Prospects
ASE Technology is expanding its advanced packaging capabilities as AI drives demand for larger chips, higher bandwidth and more complex semiconductor designs. Rising AI demand is creating hardware requirements in terms of size, complexity and integration, making packaging an important part of the AI infrastructure buildout. ASE Technology believes that hardware infrastructure has become a key bottleneck, while packaging is moving up in the system architecture value chain.
CoWoS is one of the main technologies supporting this opportunity. The company is working to increase its CoWoS scale and efficiency as demand from AI infrastructure remains strong. ASE Technology is also expanding its full process business, which management said is on track to generate about TWD 300 million in revenues in 2026. The company expects substantial growth in this business in 2027 and sees it becoming margin accretive as it scales.
Panel-level packaging could add another growth opportunity. ASX’s fully-automated 310-by-310 panel line is expected to start production in the first quarter of 2027. Management said that the solution is complementary to foundry offerings and is aimed at a similar customer set and reticle size. Customer adoption will depend on factors such as capacity, performance and speed of execution. This gives ASE Technology another packaging option as customers look for solutions to meet rising AI hardware requirements.
If ASX can bring the new capacity online as planned, CoWoS, panel packaging and LEAP could provide multiple growth drivers as AI infrastructure demand continues to expand.
Key Technical Indicator Signals Bullish Trend for ASX
ASX shares are trading above their 50-day & 200-day moving averages, a bullish technical signal that indicates the potential for continued upward momentum in the near term.
ASX 50-Day & 200-day Simple Moving Average
Image Source: Zacks Investment Research
ASX’s Valuation Reflects High Growth Expectations
ASE Technology is currently trading at a higher price-to-earnings (P/E) multiple, significantly higher than the Zacks Electronics - Semiconductors industry. ASX’s forward 12-month P/E ratio sits at 26.32X, significantly higher than the Zacks industry’s forward 12-month P/E ratio of 14.24X.
ASX Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
ASX stock also trades at a higher P/E multiple compared with other industry peers, including Amkor Technology, GlobalFoundries and Synaptics. At present, Amkor Technology, GlobalFoundries and Synaptics have P/S multiples of 20.84X, 20.43X and 21.22X, respectively.
ASX’s rally reflects investor excitement about AI-related packaging demand, putting it above the industry and peers in terms of valuation, reflecting the high growth expectations of the company in the long term.
Conclusion: Buy ASX Stock Right Now
ASE Technology continues to benefit from strong demand for LEAP services as AI drives demand for advanced packaging and testing. Management expects LEAP revenues to grow further in 2026 and is targeting a doubling of LEAP revenues in 2027. Higher LEAP volumes are also helping improve ATM margins, while the company is adding capacity to support customer demand.
Rising demand for CoWoS, panel-level packaging and other advanced packaging services could provide additional growth opportunities as the company expands capacity. Further, the stock’s valuation reflects high growth expectations for the company, which is set to benefit from strong long-term demand for AI-driven advanced packaging, including LEAP, CoWoS and panel-level packaging.
Currently, ASE Technology carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.