Gigabyte (2376.TW): AI servers to drive 2H26 growth; Capex commitments remain strong; Neutral

In this 3Q revenue preview, we expect sequential revenue growth in Oct-Dec on a YoY basis, driven by rising AI server racks, with 4Q26 revenue YoY accelerating sharply versus 1Q/2Q. However, we expect revenue to decline MoM in Oct-Dec, which we attribute to AI servers model transition and the high base in Sep; nonetheless, we continue to expect revenues to sequentially increase qoq in 4Q26E. We expect the stronger 2H26 growth to be driven by ongoing AI spending, customers' faster AI deployment, and Gigabyte's expanding customer base and enhancing backlog visibility. Customers' infrastructure readiness and components procurement should continue to improve in 2H26, supporting AI server procurement. The company maintains strong capex commitment, and we expect 2H26 capex to stay at a similar high level vs. 1H26, leading 2026 capex to grow strongly YoY to capture strong AI server demand and customers' requirements on diversifying production sites. We factor in Gigabyte's Sep revenue and rai