Disco Earnings Review: 2Q shipment guidance exceeds expectations, generative AI CPO is a growth driver, reiterate buy (Goldman Sachs)
Goldman Sachs' performance review of Disco (6146.T) showed that its 2Q shipment guidance significantly exceeded market expectations.
Goldman Sachs' performance review of Disco (6146.T) showed that its 2Q shipment guidance significantly exceeded market expectations. The report points out that the CPO (co-packaged optics) demand brought about by generative AI is the key incremental growth driver. Data shows that Disco’s FY3/26 full-year revenue is expected to reach 436.9 billion yen, and FY3/27E revenue is expected to reach 587.6 billion yen. The logic behind it is that the complexity and interconnection requirements of AI chips have surged, driving the demand for equipment for advanced packaging and cutting, and Disco, as a leader in this field, has directly benefited. One-sentence conclusion: Disco's strong shipment guidance once again confirms the driving effect of AI on demand for advanced packaging equipment, especially emerging technologies such as CPO, which have opened a new growth ceiling for the company. Positive/negative: Positive for Disco (6146.T). The market has high expectations for demand for AI equipment, but the higher-than-expected shipment guidance indicates that growth momentum may be stronger than expected. Good for Japan's semiconductor cutting/grinding equipment sector. Catalysts: 1) Order confirmation for CPO-related equipment in subsequent quarters; 2) Advanced packaging capacity expansion plans from major customers (such as TSMC and Intel); 3) The company's financial report and shipping guidance for the next quarter.