Accton (2345.TW): Margin fears overdone; 2027 re-acceleration on liquid-cooled T3 and 1.6T

We recently met with Accton's management, and the overall message was constructive on medium- to long-term demand trends. Near term, we trim our 2026 EPS estimate by 5% to reflect the AWS T3 transition in 4Q26 and margin headwinds from rising memory costs. Looking ahead, we raise our 2027/2028 EPS forecasts by 1%/3% to reflect the dual upside drivers from liquid-cooled AWS T3 modules and 1.6T switches. Accton stock has underperformed the TWSE by ~22% over the past three months on margin dilution concerns and AWS supply-chain noise. We believe these fears are overdone and expect market sentiment to turn more constructive as consignment adoption becomes better understood. With a 54% EPS CAGR over 2026-28E, we recommend investors accumulate on the recent weakness. Stay OW with a Jun-27 PT of NT$3,700, based on 25x 12M fwd EPS. Better GM and reduced cash flow pressure from consignment; AWS liquid cooling shows near-term friction but 1H27 inflection intact;