Infineon: One of Our Top Picks in Technology as Near-Term Auto and EV Weakness Seems Overdone

Narrow-moat Infineon Technologies is one of our top picks in the technology sector, as our fair value estimate of EUR 50 per share offers an attractive margin of safety for long-term, patient investors, in our opinion. We continue to like the long-term secular tailwinds in the automotive end market, as Infineon should profit from increased chip content per car, especially in electric vehicles. We’re also fond of Infineon’s green industrial power business and its exposure to renewable energy. Infineon has expanded its gross and operating margins in recent years, and we foresee the company maintaining these margins in the long run.