FormFactor (FORM) Stock Forecast & Price Target

FormFactor Inc. is positioned favorably for future growth, driven by increased demand for its probe cards and a diversified customer base, particularly in the Foundry/Logic and DRAM segments. The company reported a solid performance that exceeded expectations, indicating a positive demand backdrop fueled by rapid customer innovation and heightened test complexity, which is likely to lead to significant revenue growth through CY26. Additionally, FormFactor's ability to secure higher average selling prices and margins from its advanced products contributes to improved gross margins and overall financial strength, providing a strong foundation for continued expansion in its operations.

FormFactor Inc. is facing a challenging financial landscape, characterized by declining gross margins which were reported at approximately 39% in the first half of 2025, significantly below the target model of 47%. The company's revenue contribution from China has substantially decreased, from low-20% historically to around mid-single digits, influenced by global restrictions and the divestiture of its domestic China operations. Furthermore, potential risks associated with gross margin expansion, such as unexpected ramp-up costs and tariff-related headwinds, indicate a negative outlook for the stock, particularly amidst weakened market sentiment in key growth areas like HBM and AI infrastructure.