06:17 AM EDT, 09/09/2026 (MT Newswires) -- Morgan Stanley downgraded its rating and price target for Infineon Technologies (IFX.F), saying it views the German semiconductor company's data center narrative as capped in the short term. "On Infineon, while the structural data center opportunity remains compelling, we see limited near-term upside to expectations, with [Power and Sensor Systems] estimates looking too high and several emerging risks leaving us without a clear catalyst. We leave estimates unchanged but cut our [price target] to EUR65 from EUR81, reflecting a lower multiple for the server rack business," according to a Tuesday note on European semiconductors. "Emerging risks may prevent the market from stepping in. We see 4 potential risks that could hinder sentiment and Infineon's earnings profile: (i) 800V delays, (ii) [vertical power delivery] competition, (iii) a weaker-than-expected automotive recovery, and (iv) Module 4 manufacturing efficiencies not emerging until 2028. While we leave our estimates unchanged, we think these factors will weigh on near-term sentiment," analysts wrote. Within this context, the research firm reiterated its fiscal 2027 data center sales forecast at 2.8 billion euros, adding that it does not expect management to raise its outlook to 4 billion euros plus. Morgan Stanley moved its rating on the stock to equal-weight from overweight.

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