July GB200/GB300 rack production was about 8,000 units, with full-year shipments expected to more than double

Overview

The report provides a monthly update on GB200/GB300 NVL72-equivalent rack production and full-year forecasts for major server ODMs. Morgan Stanley estimates industry production in July 2026 at about 8,000 racks, largely flat month over month; full-year production is expected to reach 80,000 to 85,000 racks, up more than 100% from about 29,000 racks in 2025, reflecting that downstream AI server rack assembly remains in a strong expansion phase.

Core views

Hon Hai shipped about 3,600 racks in July, up 9% month over month, with a full-year forecast of about 31,700 racks; Quanta shipped about 2,200 to 2,250 racks, down 4% month over month, with a full-year forecast of about 18,700 racks; Wistron's server compute trays were equivalent to about 1,150 to 1,200 racks, down 6% month over month, and its full-year forecast was recently raised by about 3,800 rack-equivalent units to 17,900 racks. Although Wistron's absolute July shipment scale was below Hon Hai and Quanta, the report ranks stock preference as Wistron, Hon Hai, and Quanta based on potential target-price upside.

Analysis framework

The report combines ODM monthly revenue, traditional hardware shipments such as notebook and desktop PCs, AI server compute tray and full rack production to produce monthly and full-year forecasts for GB200/GB300 NVL72-equivalent racks; stock views also reference residual income valuation, potential target-price upside, and risks related to AI server penetration, product mix, and traditional business demand.

Methodology notes

• Industry chain production trackingNVL72-equivalent rack calculation

  Converts major ODMs' full racks and server compute trays into GB200/GB300 NVL72-equivalent racks and uses this to estimate monthly and full-year production.

  Wistron's data includes rack-equivalent volumes from L10 compute trays, but does not include L11 rack assembly and testing time, so actual deliveries to end customers may be lower than the production volumes listed in the report.

• Equity valuationResidual income valuation model

  Derives the base-case value of individual stocks using cost of equity, medium-term growth rate, and perpetual growth rate.

  The three base-case assumption sets are: cost of equity of 8.5%, medium-term growth of 13%, and perpetual growth of 3%; cost of equity of 9.0%, medium-term growth of 8.5%, and perpetual growth of 3%; and cost of equity of 8.7%, medium-term growth of 7.0%, and perpetual growth of 3%.

• Relative ratingRisk-adjusted relative return rating

  Overweight means the risk-adjusted total return over the next 12 to 18 months is expected to exceed the average of the analyst's industry coverage universe.

  An In-Line industry view indicates that industry performance over the next 12 to 18 months is expected to broadly track the relevant broad market benchmark; stock preference is ranked based on relative target-price upside.

Asset mapping & comparison

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

• Wistron Corporation（3231.TW）

  AI server compute tray and rack supplier, the report's top pick

  Strengths

  The full-year GB200/GB300-equivalent rack forecast was recently raised to about 17,900 racks, Wiwynn revenue continues to grow, and potential target-price upside ranks first among the three companies.

  Weaknesses

  July revenue declined 4% month over month, and shipments of notebook computers, desktop computers, monitors, and server compute trays all declined month over month.

  Comparison

  Monthly rack-equivalent volume is lower than Hon Hai and Quanta, but it ranks first in the report's stock preference.

  Risks

  AI server penetration slower than expected, weak notebook computer demand, data center price competition, rising labor costs, and pressure on margins.

• Hon Hai Precision（2317.TW）

  Major assembler of GB200/GB300 racks

  Strengths

  July rack shipments were about 3,600 units, up 9% month over month, with a full-year forecast of about 31,700 racks; July revenue rose 15% month over month and 54% year over year, with the strongest momentum in the server business.

  Weaknesses

  The business remains affected by consumer electronics, iPhone demand, and the progress of the electric vehicle business.

  Comparison

  Among the three major ODMs, it had the largest July rack shipment scale and ranks second in stock preference.

  Risks

  iPhone sales falling short of expectations, low profit contribution from the AI business, slower progress in the electric vehicle business, and adverse geopolitical developments.

• Quanta Computer Inc.（2382.TW）

  Major supplier of GB200/GB300 racks

  Strengths

  July rack shipments were about 2,200 to 2,250 units, with a full-year forecast of about 18,700 racks; revenue grew 131% year over year, and the AI server business provides structural growth.

  Weaknesses

  July rack shipments declined 4% month over month, and notebook computer shipments declined 38% month over month, weighing on monthly revenue.

  Comparison

  July rack scale ranked second among the three companies, but it ranks third in preference based on target-price upside.

  Risks

  Weakening demand for notebook computers and wearable devices, AI server penetration slower than expected, increased labor costs, sales below expectations, and price competition in the large data center market.

Key data

• July 2026 industry rack productionAbout 8,000 racksGB200/GB300 NVL72-equivalent basis, largely flat month over month.
• Full-year 2026 industry forecast80,000 to 85,000 racksExpected to grow by more than 100% year over year, versus about 29,000 racks in 2025.
• Hon Hai July rack shipmentsAbout 3,600 racksUp 9% month over month; full-year forecast of about 31,700 racks.
• Quanta July rack shipmentsAbout 2,200 to 2,250 racksDown 4% month over month; full-year forecast of about 18,700 racks.
• Wistron July rack-equivalent shipmentsAbout 1,150 to 1,200 racksDown 6% month over month; full-year forecast recently raised to about 17,900 racks.
• Quanta July revenueNT$366.3 billionDown 5% month over month and up 131% year over year; the month-over-month decline was mainly due to lower notebook computer shipments.
• Wistron July revenueNT$308.2 billionDown 4% month over month and up 61% year over year; Wiwynn revenue was NT$117.7 billion, up 6% month over month and 39% year over year.
• Hon Hai July revenueNT$946.5 billionUp 15% month over month and 54% year over year, with server-related businesses showing the strongest month-over-month increase.

Impact & implications

Full-year rack shipments more than doubling implies that AI server capital expenditure continues to transmit downstream to ODM assembly, compute trays, and related components. Hon Hai demonstrates strong execution with the highest shipment scale and July month-over-month growth; Wistron benefits from an upward revision to the full-year forecast and higher potential valuation upside; Quanta maintains a large shipment scale, but is affected in the short term by a pullback in traditional notebook computer shipments and a slight monthly decline in rack shipments. The industry overall is still rated In-Line, indicating that strong growth expectations may already be partly reflected in valuations.

Risks

• Actual rack deliveries to end customers may be lower than production estimates because Wistron's methodology includes rack-equivalent volumes from L10 compute trays that have not yet completed L11 assembly and testing.
• AI server penetration or server demand may be weaker than expected, potentially leading to downward revisions to the full-year forecast of 80,000 to 85,000 racks.
• Intensified price competition in the large data center market, rising labor costs, or deterioration in product mix may compress ODM margins.
• Weak demand for traditional consumer electronics such as notebook computers, Apple Watch, and iPhone may offset AI server growth.
• Development of the electric vehicle business or progress in disposing of consumer electronics businesses may fall short of expectations.
• Geopolitical changes may affect foreign investment, supply chain deployment, and customer orders.
• Morgan Stanley has investment banking or other commercial relationships with some covered companies, and investors should use this report as only one factor in decision-making.

What to watch

• Whether GB200/GB300 NVL72 rack production can resume month-over-month growth in subsequent months of 2026.
• The second-half capacity ramp and end-customer delivery pace implied by the full-year target of 80,000 to 85,000 racks.
• Wistron's conversion efficiency from L10 compute trays to L11 full rack assembly, testing, and customer delivery.
• Whether Hon Hai's server business can sustain growth faster than other business segments.
• Whether Quanta's traditional notebook computer shipments stabilize, and whether AI server growth can continue to offset volatility in traditional businesses.
• The impact of AI server competition on ODM pricing, product mix, and margins.
• Subsequent adjustments to target prices, earnings forecasts, and full-year rack shipment assumptions for the three companies.