KUALA LUMPUR: Inari Amerton Bhd's outlook remains bright, supported by positive sentiment for the technology sector, said Public Investment Bank Bhd (PublicInvest).
The bank sees Inari as a potential beneficiary of increasing spending on data centres and artificial intelligence (AI).
It said this is due to the fact that the company's Data Communication segment, which made up 14 per cent of its group sales, is likely to see increasing adoption of optical connectivity in the AI data centre to cater for the low latency and high bandwidth requirements.
"Apart from that, management is looking into the testing and packaging of AI-related products, which could see tremendous potential opportunities given their wide applications," it said.
Meanwhile, PublicInvest said the bank is confident that the adoption of AI features in the upcoming smartphone models will lead to a stronger global demand for smartphones as consumers have a stronger tendency to replace their phones when there is a new technological breakthrough.
Sources said that the US smartphone maker has recently told its suppliers to raise their production by 10 per cent to 90 million units in the upcoming iPhone 16 model, which is set to be unveiled in September, as it is betting on artificial intelligence to reverse an overall slide in iPhone sales.
Inari, the leading outsourced semiconductor assembly and test (OSAT) provider to Broadcom's RF business, which in turn supplies Apple and Samsung with their leading smartphones, will benefit from this.
"Going forward, we expect the radio frequency segment to remain a key growth driver for Inari.
"Supported by a rosy outlook and positive sentiment for the technology sector, we raised our target price from RM3.73 to RM4.55.
"We also raised our financial year 2025 (FY25) and FY26 earnings forecast by 1 and 7 per cent, respectively. Maintain Outperform," it added.