Goldman Sachs raises Wiwynn target price to NT$10,000, maintains Buy

Overview

This report is a company research update on Wiwynn from Goldman Sachs. The report believes that Wiwynn's future growth will be driven primarily by next-generation GPU and ASIC AI servers, capital expenditure expansion by leading US cloud service customers, potential improvements in customer penetration, AI server SKU expansion, and improving general-purpose server demand. Goldman Sachs maintains its Buy rating and significantly raises its target price and earnings forecasts.

Core views

Goldman Sachs' core view is that Wiwynn is in an upcycle in AI server demand, particularly as increasing architectural complexity and computing density in GPU and ASIC servers drive higher value per system. The report forecasts a 32% revenue CAGR in 2026-2028 and believes ASIC AI servers will have better gross margins than GPU AI server racks due to their lower GPU cost burden and higher degree of customization. General-purpose server demand is also being supported by agentic AI applications, providing additional support.

Analysis framework

The report evaluates Wiwynn's growth prospects and valuation reasonableness by combining monthly revenue tracking, quarterly revenue forecasts, product mix and gross margin changes, earnings forecast revisions, comparison with Bloomberg consensus estimates, peer P/E and earnings growth correlations, PEG ranges, and Goldman Sachs' factor framework. The target price is derived using a 12-month P/E valuation methodology based on 2027 expected earnings and a 20.0x target P/E.

Methodology notes

• Valuation methods12-month P/E valuation

  Derive the target price using 2027 expected EPS and a 20.0x target P/E.

  Goldman Sachs raised the target P/E from 15.8x to 20.0x, based on higher expected 2028 net profit growth and the correlation between forward P/E multiples and earnings growth among peers.

• Earnings forecastsRevenue and net profit revisions

  Raise forecasts based on strong June revenue, demand for AI and general-purpose servers, and prospects for customer and SKU expansion.

  2026-2028 revenue forecasts were raised by 9%/12%/13%, and net profit forecasts by 7%/11%/14%; R&D expense ratios were also raised to reflect the investment required as GPU and ASIC AI server products migrate to more complex architectures.

• Factor analysisGS factor profile

  Evaluate stock characteristics across growth, financial returns, valuation multiples, and composite factor dimensions.

  The GS factor profile uses analyst forecasts for sales, EBITDA, EPS, ROE, ROC, and valuation multiples, comparing them with market and industry peers.

Asset mapping & comparison

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

• Wiwynn (6669.TW)

  Core research subject, a Taiwanese server ODM design and manufacturing company.

  Strengths

  Has advantages in AI server R&D and resource investment, may expand coverage of leading US CSP customers, and may benefit from GPU and ASIC AI server SKU expansion.

  Weaknesses

  2Q26 revenue increased only 1% quarter-on-quarter, affected by the relatively low contribution from AI servers and the shift of general-purpose servers toward a consignment business model; more complex product architectures are also increasing R&D expenses.

  Comparison

  Goldman Sachs expects its gross margin performance to exceed Bloomberg consensus and believes ASIC AI server gross margins are better than those of GPU AI server racks.

  Risks

  AI server demand below expectations, slower-than-expected recovery in general-purpose servers, and intensifying competition in the server ODM market.

• ADVANCED MICRO DEVICES INC (AMD.US)

  Potential AI server rack-related platform; the report mentions AMD AI server racks as an example of an AI server SKU that Wiwynn may expand into.

  Strengths

  If related AI server models ramp up, they could provide Wiwynn with additional product opportunities.

  Weaknesses

  The report does not provide a rating or financial forecasts for AMD itself.

  Comparison

  In this report, AMD primarily appears in the context of AI server SKU expansion rather than as a core valuation subject.

  Risks

  Demand for the related platform, customer adoption timing, or supply chain progress falling short of expectations could affect Wiwynn's order ramp-up.

Key data

• RatingBuyGoldman Sachs maintains its Buy rating.
• 12-month target priceNT$10,000.00The previous target price was NT$7,147.
• Current priceNT$5,390.00Price disclosed on the report cover.
• Implied upside85.5%Calculated based on the target price and current price.
• Expected 2026-2028 revenue CAGR32%Driven by AI servers, US CSP capital expenditure, and general-purpose server demand.
• 2026-2028 net profit forecast increase7% / 11% / 14%Primarily driven by higher revenue forecasts.
• 2026-2028 revenue forecast increase9% / 12% / 13%Reflecting strong June revenue and improving AI server demand.
• June revenueNT$111bnUp 33% month-on-month and 30% year-on-year, exceeding Goldman Sachs' forecast by 22%.
• Expected 3Q26 revenue quarter-on-quarter growth+28% QoQMore AI servers are expected to begin ramping up.
• 2027 target P/E20.0xPreviously 15.8x.
• Implied PEG at new target price1.1xWithin the peer range of 0.8x to 1.4x.
• Market capitalizationNT$942.4bn / US$29.0bnKey data on the report cover.

Impact & implications

If Goldman Sachs' view is realized, Wiwynn will benefit from the AI infrastructure investment cycle and the upgrading of its server product mix, with revenue and earnings growth potentially continuing to exceed market expectations. The substantial target price increase indicates stronger institutional confidence in its leading AI server ODM position, penetration of major US cloud service customers, and improving ASIC server gross margins; however, the higher valuation also implies greater market demands regarding execution and demand sustainability.

Risks

• AI server demand growth falls short of expectations.
• General-purpose server demand recovers more slowly than expected.
• Competition in the server ODM market becomes more intense.
• Higher architectural complexity in GPU and ASIC AI servers leads to an increase in the R&D expense ratio.
• Customer expansion or AI server SKU expansion progresses more slowly than expected.

What to watch

• Whether monthly revenue from July to September maintains quarter-on-quarter growth.
• Whether 3Q26 revenue achieves Goldman Sachs' expected 28% quarter-on-quarter growth.
• Trends in capital expenditure by leading US CSPs and the pace of AI server procurement.
• The ramp-up speed of new GPU and ASIC AI server models and changes in product gross margins.
• Whether general-purpose server demand continues to be driven by agentic AI.
• Wiwynn's customer penetration and progress in expanding AI server SKUs.