Gigabyte (2376): AI server-rack demand is expected to accelerate Gigabyte's second-half 2026 growth, while Goldman Sachs maintains Neutral.

Overview

This earnings preview examines Gigabyte's August revenue and its expected second-half 2026 acceleration from AI server-rack shipments. Goldman Sachs raises earnings estimates on stronger revenue assumptions but maintains Neutral and an unchanged NT$487 12-month target price.

Core views

Goldman Sachs expects Gigabyte's revenue growth to accelerate through September to December as AI server-rack shipments rise and average selling prices increase. It forecasts 3Q26 and 4Q26 revenue growth of 81% and 79% YoY, respectively, compared with 60% in 1Q26 and 41% in 2Q26. September and October revenue are projected at NT$52.351bn and NT$52.874bn, respectively, each about 87% higher YoY. The report attributes the stronger second-half outlook to ongoing AI spending, faster customer AI deployment, an expanding customer base and improved backlog visibility. It also expects customers' infrastructure readiness and component procurement to improve further in 2H26, supporting AI-server purchasing. The institution expects Gigabyte to sustain a high level of capital expenditure in 2H26, similar to 1H26. It forecasts 2026 capex to rise 143% YoY to NT$2.8bn, intended to capture AI-server demand and meet customers' requirements for diversified production locations across Taiwan, the US, Europe and Southeast Asia. After incorporating August revenue, Goldman Sachs raises its 2026, 2027 and 2028 revenue forecasts by 3%, 3% and 4% to NT$553.599bn, NT$728.252bn and NT$891.025bn. The increases reflect higher expected AI-server volume and higher rack ASPs as servers migrate toward next-generation systems with greater computing power and more complex designs. Net-income forecasts increase 2%, 6% and 8% to NT$21.165bn, NT$25.779bn and NT$29.988bn, while gross, operating and net-margin assumptions are largely unchanged. For valuation, Goldman Sachs continues to apply a near-term P/E framework to derive its 12-month target price. It reduces the target 2027E P/E multiple to 14.1x from 14.7x, based on the correlation between peers' forward P/E multiples and average EPS growth; the methodology is unchanged. The revised multiple and higher earnings forecasts leave the target price unchanged at NT$487. The report notes that 14.1x lies within Gigabyte's historical average and average-minus-one-standard-deviation forward P/E range, and maintains Neutral.

Analysis framework

The report starts with monthly revenue and second-half shipment expectations, links AI-server demand, ASPs, customer deployment and capacity spending to revenue forecasts, then revises earnings while holding margin assumptions broadly steady. It values Gigabyte using a peer-based relationship between forward P/E multiples and EPS growth, cross-checked against the company's historical forward P/E trading range.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Near-term P/E valuation using a 2027E target multiple

  Goldman Sachs applies a 14.1x 2027E P/E multiple to derive the 12-month target price. The multiple is informed by the observed relationship between peers' forward P/E ratios and EPS growth and is compared with Gigabyte's historical valuation range.

• Industry AnalysisVolume-price decomposition

  AI-server volume and server-rack ASP assumptions

  The earnings revision separates stronger expected AI-server shipments from higher rack selling prices, with next-generation systems expected to carry more computing power and design complexity.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Gigabyte (2376.TW)

  Primary covered company expected to benefit from AI server-rack demand, higher ASPs and expanding customer deployments.

  Strengths

  Expected acceleration in AI-server revenue, improved backlog visibility, customer-base expansion and capacity investment across multiple production locations.

  Weaknesses

  Margins are expected to remain broadly unchanged despite higher revenue assumptions.

  Comparison

  Its 2027E P/E target is derived from the correlation between PC/server peers' forward P/E multiples and EPS growth.

  Risks

  PC-market recovery, gaming-PC growth and AI-server ramp-up could each be stronger or weaker than expected.

Key data

• August 2026 revenueNT$47.401bn-1% versus Goldman Sachs estimate; 98% YoY growth.
• 3Q26E revenue growth81% YoYVersus 41% YoY in 2Q26.
• 4Q26E revenue growth79% YoYDriven by AI server racks and higher ASPs.
• September 2026E revenueNT$52.351bn87% YoY growth forecast.
• October 2026E revenueNT$52.874bn87% YoY growth forecast.
• 2026 capexNT$2.8bnForecast to grow 143% YoY.
• 2026-28E net-income revisions+2% / +6% / +8%Mainly driven by higher revenue forecasts.
• 2027E target P/E14.1xReduced from 14.7x; used to support the unchanged target price.

Impact & implications

The report argues that stronger AI-server-rack demand and pricing can support a pronounced second-half revenue acceleration and higher medium-term earnings. However, the lower target P/E multiple offsets the earnings revisions, leaving the NT$487 target price and Neutral rating unchanged.

Risks

• PC-market recovery could be stronger or weaker than expected.
• Gaming-PC growth could be faster or slower than expected.
• AI-server ramp-up could be faster or slower than expected.

What to watch

• September through December revenue delivery, including the forecast NT$52.351bn in September and NT$52.874bn in October.
• Customer AI deployment, infrastructure readiness and component procurement in 2H26.
• The pace of AI-server-rack ASP gains and next-generation server migration.
• Whether capex remains at a high 2H26 level and supports diversified production capacity.