Goldman Sachs calls for buying Wiwynn! The target price rises to 4,000 yuan, optimistic about the explosive demand for AI servers

Goldman Sachs Securities recently released a report stating that server giant Wiwynn (6669) hit a new high in revenue in September, showing strong growth momentum. This trend is expected to continue until the end of the year. Goldman Sachs predicts that Wiwynn's fourth-quarter revenue will increase by more than 60% year-on-year and 8% quarter-on-quarter. Therefore, it raised Wiwynn's target price from 3,777 yuan to 4,000 yuan and maintained a "buy" rating.

Wiwynn recently announced that its revenue in September reached a record high of 172.62 billion yuan in a single month, an increase of 19.6% compared to August this year, and a significant increase of 99.99% compared to the same period last year. As for the consolidated revenue in the third quarter of this year, it was 434.618 billion yuan, a quarterly increase of 56.2%, which also set a new single-quarter high.

Goldman Sachs believes that Wiwynn's revenue in September was more than 19% higher than the original estimate, reflecting that the business growth momentum is better than expected. It is expected that Wiwynn's annual revenue growth rate in each month can maintain double-digit growth until the end of the year, mainly benefiting from four major drivers.

First, demand from major customers for the new generation of Application Special Integrated Circuit (ASIC) AI servers continues to increase, covering solutions such as air cooling and liquid cooling. Secondly, driven by the development of agent-based AI, demand for traditional server terminals remains stable. Third, the new generation of AI server cabinets equipped with graphics processing units (GPUs) is expected to enter mass production in the fourth quarter, covering NVIDIA and AMD platforms; fourth, the ASIC AI server business is expected to welcome new customers, adding momentum to subsequent growth.

In the report, Goldman Sachs also further raised the forecast for AI chip demand implied by AI servers, raising the demand forecasts for 2027 and 2028 by 9% and 19% respectively, and expected the penetration rate of ASIC in AI chips to increase to 58% in 2028. Goldman Sachs estimates that the total capital expenditures of major U.S. cloud service providers (CSPs) will increase by 84%, 52%, and 13% respectively from 2026 to 2028.

Goldman Sachs also simultaneously revised up its CSP capital expenditure forecast, raising the estimates from 2026 to 2028 by 4%, 17% and 22% respectively. It is estimated that the total capital expenditure in 2028 will reach US$1.39 trillion, further strengthening Goldman Sachs's positive view of Wiwynn's future operations.

In addition, Goldman Sachs raised Wiwynn's revenue forecasts for 2027 and 2028 by 6% and 9% respectively; its after-tax net profit forecasts from 2026 to 2028 were raised by 3%, 12% and 13% respectively, mainly reflecting factors such as revenue growth, gross profit margin improvement, and lower operating expense ratios.

Goldman Sachs expects Wiwynn's after-tax net earnings per share (EPS) to grow at an annual rate of 37% from 2027 to 2028, and uses a price-to-earnings ratio of 20.3 times as the basis for evaluation, raising the target price to 4,000 yuan. Overall, Goldman Sachs is optimistic about Wiwynn's mid- to long-term growth prospects, driven by continued expansion in demand for ASICs and GPU AI servers, increased capital expenditures by cloud players, and improved profitability.