TISCO Upgrades Thai Electronics Sector to 'Overweight' on Data Center, AI Outlook

TISCO Securities upgraded its rating on Thailand's electronic components sector to "overweight" from "neutral," anticipating a stronger performance in the second half of 2026. The brokerage pointed to improved visibility on data-center capital spending and a significant recent share price decline that it believes has already priced in market pessimism.

Catalysts for the Upgrade

According to a note from TISCO, the sector has underperformed the broader Stock Exchange of Thailand (SET) index by approximately 33% recently, creating a more attractive entry point for investors. The firm's positive outlook is supported by expectations of heavy capital expenditure from major technology companies in 2027.

TISCO estimates that spending commitments from hyperscalers and AI firms—including Amazon, Microsoft, Alphabet, Oracle, Meta, and SpaceX—could surpass $1.25 trillion in 2027, a 47% increase from 2026. The brokerage also noted it has rolled its valuation framework forward to 2027, using 2028 earnings estimates to assess the stocks.

Key Stock Rating Changes

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TISCO identified Delta Electronics and Hana Microelectronics as its top picks within the sector, issuing the following rating and price target adjustments:

• Delta Electronics Thailand (DELTA): Upgraded to "buy" from "hold," with the price target raised to 282 baht from 268 baht. TISCO stated that the stock's recent 37% decline from its June 2026 peak has accounted for risks like raw-material shortages. The firm expects demand for Delta's power-electronics products to remain robust, supported by sustained hyperscaler spending.
• Hana Microelectronics (HANA): Upgraded to "buy" from "hold," with a significant price target increase to 61.50 baht from 50.50 baht. The broker expressed increased confidence in Hana's AI-related revenue, which is expected to begin in the third quarter of 2026 after the completion of customer qualifications.
• KCE Electronics (KCE): Maintained a "hold" rating, while the price target was lifted to 60.25 baht from 55.50 baht. TISCO noted that while KCE could see upside from capacity expansion and diversification into new markets like humanoid robotics, rising copper prices pose a long-term risk to margins.

Market Implications

The upgrade suggests that TISCO sees the potential for the Thai electronics sector to outperform the broader market, driven by powerful global trends in AI and cloud computing. For investors, the note highlights specific companies poised to benefit from these secular growth drivers, while also acknowledging company-specific risks and valuations that have become more compelling after the recent sell-off.