Nomura: Gigabyte (2376.TW) Benefiting From Neocloud Growth
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Nomura identifies Gigabyte (2376.TW) as a prime beneficiary of accelerating neocloud expansion, primarily driven by proliferating artificial intelligence server demand. The firm projects 2026 revenue will grow 30% year-over-year, underpinned by strong order momentum from neocloud clients like CoreWeave, which alone contributes approximately 40% of total revenue. Crucially, AI servers command higher gross margins than traditional servers, a dynamic expected to lift the overall gross margin to 15% in 2026. Gigabyte's market share in the AI server segment is forecasted to expand from 5% in 2025 to 8% in 2026. While traditional motherboard revenues should remain flat, profits remain stable, and robust AI infrastructure growth effectively offsets cryptocurrency-related volatility in the graphics card segment. Net profit is anticipated to surge 35% year-over-year to TWD 12 billion. Nomura reiterates a Buy rating with a target price of TWD 400, derived by applying a 20 times multiple to the 2026 estimated earnings per share of TWD 20. This target implies roughly 20% upside potential. Principal risks include a potential slowdown in neocloud capital expenditures, intensifying competitive pressures within the server supply chain, and continued fluctuations in graphics card demand. Overall growth heavily relies on sustained AI server deployments.