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Diodes (DIOD) Is Up 20.7% After Strong Q4 Results, Buybacks And Upbeat Q1 2026 Guidance

Simply Wall St·02/13/2026 10:32:06
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  • In February 2026, Diodes Incorporated reported fourth-quarter 2025 results showing higher sales and earnings year-over-year, outlined full-year growth in revenue and net income, completed a share repurchase of 720,485 shares for US$33.81 million, and issued first-quarter 2026 revenue guidance of about US$395 million, plus or minus 3%, indicating better-than-usual seasonality.
  • Management also introduced three-year interim financial targets, including aspiring to reach US$2 billion in annual revenue and a gross margin above 35%, supported by growth in AI server-related applications and a heavier product focus on automotive and industrial markets.
  • Now we will examine how Diodes’ stronger-than-typical first-quarter revenue guidance could influence the company’s existing investment narrative.

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Diodes Investment Narrative Recap

To own Diodes, you need to believe its shift toward automotive, industrial and AI server applications can gradually improve margins without overstretching its manufacturing base. The stronger first quarter 2026 revenue guidance reinforces that AI and higher value segments are gaining traction, which supports the near term catalyst of continued product mix improvement. The biggest near term risk, in my view, remains execution on capital intensive in house manufacturing and inventory management, and this news does not remove that concern.

The most relevant recent announcement is management’s three year interim targets, aiming for US$2 billion in annual revenue and a gross margin above 35%. Against that backdrop, the first quarter 2026 guidance of about US$395 million, plus or minus 3 percent, provides an early test of whether demand in AI servers, automotive and industrial can support that ambition, or whether lingering inventory and pricing pressures could slow the path toward those goals.

Yet beneath the encouraging guidance, investors should be aware that concentration in cyclical computing and consumer markets still leaves Diodes exposed to...

Read the full narrative on Diodes (it's free!)

Diodes' narrative projects $1.8 billion revenue and $124.0 million earnings by 2028.

Uncover how Diodes' forecasts yield a $58.67 fair value, a 19% downside to its current price.

Exploring Other Perspectives

DIOD 1-Year Stock Price Chart
DIOD 1-Year Stock Price Chart

While consensus already saw AI servers as a catalyst, the most optimistic analysts expected about US$1.8 billion revenue and US$225.5 million earnings by 2028, which is far more bullish than the baseline view and may look different in light of this stronger guidance.

Explore 2 other fair value estimates on Diodes - why the stock might be worth as much as $58.67!

Build Your Own Diodes Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.