Auras’ liquid cooling business is accelerating; Goldman Sachs maintains a Buy rating

Overview

This report is Goldman Sachs’ company research update on Auras. After a recent visit to Auras in Taiwan, the analyst noted that management remains constructive on 2026 growth, with key drivers including rising AI server liquid-cooling penetration, liquid-cooling component specification upgrades, and broader product-line and customer coverage. The report maintains Auras at Buy.

Core views

The core view is that Auras is in a phase of rapid liquid-cooling ramp-up and product-mix upgrade. In 2025, company revenue grew 48% year over year, and growth accelerated further to 95% year over year in the first two months of 2026. Goldman Sachs expects 2026E net profit to grow by triple digits, with server liquid-cooling revenue contribution rising to 62% and consolidated gross margin improving from 27% in 2025 to 31%. On specification upgrades, in 2026 GPU AI server racks, the inner manifold in each compute tray becomes more complex, lifting the USD value by more than 200%; the rack manifold may also gain value due to larger QD, longer manifolds, and higher precision. On new products, in-row CDU began small-volume production in 1Q26 and is planned to ramp in 2Q26; DIMM cold plates are also expected to start contributing revenue in 2026. On customer expansion, the company’s exposure in ASIC AI servers has expanded from compute trays in GPU AI servers to both compute trays and switch trays.

Analysis framework

The report uses company visits, management feedback, revenue growth trends, product specification upgrades, product-line expansion, and customer expansion for fundamental analysis, and combines this with a relative-valuation framework from the Taiwan technology hardware coverage universe to determine the 12-month target price.

Methodology notes

• Valuation methodsnear-term P/E

  12-month target price valuation

  Goldman Sachs uses 2027E EPS and a 17.9x target P/E to derive Auras’ 12-month target price of NT$1,283; the target P/E comes from the correlation between technology hardware peers’ P/E and EPS growth, and also references the company’s 2027-28E EPS growth of 23%.

• factor_profileGS Factor Profile

  growth, financial return, valuation multiples, and composite percentile comparison

  Goldman Sachs Factor Profile compares a stock with the market and industry peers across growth, financial return, valuation multiples, and composite metrics; growth uses forward sales, EBITDA, and EPS growth, financial return uses ROE, ROCE, and CROCI, and valuation multiples use metrics such as P/E, P/B, P/D, EV/EBITDA, and EV/FCF.

• scenario_frameworkM&A Rank

  potential acquisition probability score

  In its global coverage, Goldman Sachs uses an M&A framework to assess the probability that a company becomes a takeover target based on qualitative and quantitative factors; scores of 1 to 3 represent high, medium, and low probability respectively. If the score is 1 or 2, an M&A factor is usually incorporated into the target price.

Asset mapping & comparison

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

• Auras (3324.TWO)

  The covered name; a Taiwan technology hardware and AI server liquid-cooling supply-chain company

  Strengths

  The liquid-cooling business is ramping quickly, with 2025 revenue up 48% year over year and the first two months of 2026 up 95% year over year; product specification upgrades increase per-rack value; in-row CDU and DIMM cold plates add new product contributions; customer exposure expands from GPU AI servers to ASIC AI servers.

  Weaknesses

  Growth is highly dependent on AI server liquid-cooling penetration and customer expansion pace, and weakness in the PC market may also weigh on overall demand.

  Comparison

  The valuation framework references the correlation between technology hardware peers’ P/E and EPS growth; the target P/E is 17.9x on 2027E EPS.

  Risks

  Liquid-cooling penetration below expectations, weaker-than-expected AI server demand, PC market below expectations, and intensifying competition from existing and new suppliers.

Key data

• Report date2026-03-16The report was published at 8:53AM HKT on 16 March 2026.
• Analyst ratingBuyThe report explicitly maintains a Buy rating.
• 12-month target priceNT$1,283Based on a 17.9x target P/E on 2027E EPS.
• Current priceNT$1,055.00The disclosure page lists Auras at NT$1,055.00.
• Implied upsideabout 21.6%Calculated from the NT$1,283 target price and NT$1,055.00 current price.
• 2025 revenue growth+48% YoYCompany revenue grew 48% year over year in 2025.
• Revenue growth in the first two months of 2026+95% YoYRevenue grew 95% year over year in the first two months of 2026, showing the liquid-cooling ramp-up.
• 2026E server liquid-cooling revenue contribution62%Goldman Sachs expects server liquid-cooling revenue contribution to rise to 62%.
• Expected consolidated gross margin31%Goldman Sachs expects consolidated gross margin to expand from 27% in 2025 to 31% in 2026.
• Inner manifold value changeIncrease of more than 200%Management said that in 2026 GPU AI server racks, the greater complexity of the inner manifold in each compute tray will drive USD value up by more than 200%.
• 2027-28E EPS growth23% YoYUsed in the peer-correlation framework for deriving the target P/E.

Impact & implications

If liquid-cooling penetration, specification upgrades, and customer expansion proceed as management expects, Auras’ revenue mix will tilt further toward higher-value liquid-cooling components, supporting margin expansion and faster earnings growth. The report remains positive on the AI server liquid-cooling supply chain, but the investment conclusion depends heavily on the pace of liquid-cooling penetration, AI server demand, and the competitive landscape.

Risks

• Liquid-cooling penetration below expectations.
• Weaker-than-expected AI server demand.
• PC market weaker than expected.
• Potential competition from existing suppliers and new entrants.

What to watch

• Whether server liquid-cooling revenue contribution rises toward 62% in 2026.
• Whether the 95% year-over-year revenue growth in the first two months of 2026 can be sustained.
• The ramp-up progress of in-row CDU in 2Q26.
• The pace of revenue contribution from DIMM cold plates in 2026.
• AI server liquid-cooling penetration in ASIC AI servers and Auras’ customer expansion in compute trays and switch trays.
• Whether consolidated gross margin improves from 27% in 2025 to 31% in 2026.