Amkor Technology (AMKR) has ample opportunity in compute, but higher-than-expected capital expenditure guidance could prove tricky in 2026, Morgan Stanley said in a Tuesday research report.

The firm said it is more conservative than the company's 2026 growth guidance for communications and consumer segments due to ongoing demand destruction in smartphones and consumer electronics amid a memory shortage.

Analysts highlighted that the company's capex guide implies capital intensity of 40%, but $2.85 billion of the $7 billion planned capex for the Arizona facility is expected to be funded by the government.

Morgan Stanley now expects fiscal 2026 and 2027 revenue of $7.08 billion and $7.71 billion, respectively, from $7 billion and $7.41 billion earlier.

The firm reiterated its equal-weight rating on the stock and raised its price target to $45 per share from $28.

Price: 50.83, Change: -1.69, Percent Change: -3.22