AVerMedia / Avnet (AVC)
B2B contract design + manufacturing of thermal modules (air + liquid cooling) sold to server ODMs/OEMs and hyperscalers; volume-driven, capacity-intensive, tied to the Nvidia AI-accelerator roadmap.
Earnings, margins, COGS & capex
FY2025 revenue nearly doubled to TWD 139.64B (+94.6% YoY) with net income TWD 19.19B (+134.8%), net margin 13.7% and full-year diluted EPS TWD 48.24. Growth is overwhelmingly AI-server + liquid-cooling driven; the legacy notebook/desktop/consumer fan business is the lower-margin base. Gross margin expanded to ~25% (26.4% in Q4 2025) as liquid-cooling mix rose. Management calls 2026 the 'liquid cooling era' and guides to continued sequential growth and margin improvement on GPU/ASIC upgrades and rising liquid-cooling attach.
Income statement — where each revenue dollar goes
% of revenueOf every $1 of revenue, ~75¢ is cost of goods and ~6¢ operating expense, leaving ~19¢ of operating profit (~14¢ net).
Revenue trend
Margins
expanding on liquid-cooling mix (23% -> 25% YoY)
up sharply — op income TWD 17.54B vs 7.47B PY
up (net income +134.8% on +94.6% revenue)
COGS structure
Dominated by metals (copper, aluminum), CNC-machined cold plates, heat pipes/vapor chambers, motors/fans, pumps and quick-disconnect couplings, plus labor across Taiwan/China/Vietnam plants. Copper and precision-machining capacity are the key swing costs; liquid-cooling parts carry richer margin than legacy air-cooling fans.
Capex
Heavy and rising — AVC is adding cold-plate, manifold and chassis capacity in Taiwan, China and Vietnam to meet GB200/GB300 rack demand; capex ramp is a near-term cash drag and an execution risk. Precise figure not disclosed in sources reviewed.
Latest earnings
Record quarter; strong results on AI-server + liquid-cooling demand (exact vs-estimate not disclosed in sources reviewed)
Management expects continued sequential growth and margin improvement through 2026, led by GPU/ASIC upgrades and rising liquid-cooling adoption; chairman flagged 2026 as the 'liquid cooling era' with major cold-plate/manifold/chassis output expansion.
- Q4 2025 revenue
- TWD 47.8B
- Q4 2025 gross margin
- 26.4%
- Q4 2025 EPS
- TWD 16.9
- FY2025 net income
- TWD 19.19B (+134.8%)
- FY2025 diluted EPS
- TWD 48.24
Growth drivers
- Nvidia GB200/GB300 (Blackwell) liquid-cooled rack ramp — AVC holds an estimated ~30-40% share of GB200 liquid cooling, #2 behind Cooler Master
- Air-to-liquid cooling transition as rack power density rises (GB200 NVL72 ~120kW/rack)
- Content-per-rack growth — cold plates + manifolds + chassis + CDU components, higher $ per system than a fan module
- ASIC/custom-accelerator cooling (hyperscaler in-house chips) beyond merchant GPU
- Capacity expansion (Vietnam/China) unlocking order fulfillment through 2026
Bull & bear
AVC is a top-two arms dealer in the single fastest-growing datacenter bottleneck — cooling — with proven Nvidia qualification, vertical integration and capacity coming online just as liquid cooling goes mainstream.
- Air-to-liquid is a multi-year secular transition; GB200/GB300 racks REQUIRE liquid cooling, and AVC is one of only two qualified high-share suppliers
- Content-per-rack keeps rising (cold plate + manifold + chassis + CDU parts), so revenue can grow faster than unit shipments
- FY2025 proved operating leverage — net income grew ~1.4x faster than revenue with gross margin expanding into the mid-20s
- Capacity build in Vietnam/China converts a demand-constrained order book into shipped revenue through 2026
- Optionality in immersion, ASIC cooling and higher-density Rubin-era platforms extends the runway beyond Blackwell
The stock discounts near-perfection — ~56x FY2025 earnings (~44x on the latest trailing-twelve-months) after a ~+244% LTM run — while the supplier pool for GB200/GB300 cooling is widening fast and AI capex is inherently cyclical.
- Valuation: ~56x FY2025 earnings (~44x TTM) and ~+244% LTM leave thin margin for a growth or margin disappointment
- Share risk: Cooler Master leads batch-one GB200 (>50%); Delta, Auras, Boyd, CoolIT and Nidec are all qualifying — commoditization pressures price and margin
- Concentration: demand hinges on Nvidia's roadmap timing and a few ODMs/hyperscalers; any GB300/Rubin slip or capex digestion cuts orders sharply
- Capex-heavy ramp can strain FCF and invite overcapacity if the liquid-cooling attach curve flattens
- Input-cost (copper) and Taiwan/China geopolitical/tariff exposure sit on top of a cyclical end-market
What it is worth
Peer-relative multiple + reverse-DCF sanity check (web-grounded; no full model)
AI-capex digestion or share loss to new entrants cuts growth to ~10-15% and pressures margin; a high-multiple cyclical de-rates sharply (potential 40%+ drawdown from peak).
Strong but decelerating growth (~30-40% in FY2026) with roughly flat gross margin as competition qualifies; the FY2025 ~56x / TTM ~44x multiple compresses toward the 25-35x range as growth normalizes — total return tracks earnings, not re-rating.
Sustained 40%+ revenue growth into 2026-27 with margin expansion as liquid-cooling content per rack rises and share holds — multiple defensible, further upside on Rubin/ASIC content.
At ~TWD 1.08T market cap on ~TWD 19.19B FY2025 net income (diluted EPS TWD 48.24), AVC trades ~56x FY2025 earnings; on a trailing-twelve-month basis it is ~44x (TTM EPS ~TWD 60, reflecting stronger 2026 quarters) after a ~+244% LTM move. Those multiples only hold if FY2026 delivers another year of 40%+ growth with stable-to-rising ~25% gross margin AND AVC defends its ~30-40% GB200/GB300 liquid-cooling share against Cooler Master, Delta, Auras, Boyd and CoolIT. Reverse-DCF read: the price implies durable liquid-cooling leadership through the Rubin generation, not just a Blackwell one-off.
SWOT
Strengths
- Top-two global thermal-module maker with decades of scale in fans, heat pipes and vapor chambers now leveraged into liquid cooling
- Qualified #2 supplier on Nvidia GB200 liquid cooling (~30-40% share) with vertical integration across cold plate, manifold and chassis
- Explosive, high-margin AI mix: revenue +94.6% and net income +134.8% in FY2025 with expanding gross margin
- Multi-site manufacturing footprint (Taiwan/China/Vietnam) providing capacity and some geopolitical diversification
Weaknesses
- Rich valuation (~56x FY2025 earnings — ~44x on a trailing-twelve-month basis as 2026 profits ramp) prices in sustained hyper-growth — little room for a stumble
- Heavy customer/platform concentration on Nvidia's accelerator roadmap and a handful of server ODMs
- Capex-heavy ramp pressures free cash flow and adds execution/quality risk on new liquid-cooling lines
- Legacy air-cooling/consumer fan segment is lower-margin and structurally slower-growing
Opportunities
- GB300/Rubin and ASIC generations raise cooling content per rack and total addressable value
- Immersion and rear-door/CDU adjacencies extend beyond direct-to-chip cold plates
- Hyperscaler custom-silicon cooling demand diversifies away from merchant GPU
- Space/defense thermal-plate R&D and industrial thermal as optionality
Threats
- Intensifying competition — Cooler Master leads GB200 batch-one (>50%); Delta, Auras, Boyd, CoolIT, Nidec entering
- Cyclical AI-capex risk — a hyperscaler digestion/pause hits order flow hard
- Taiwan/China geopolitical and US-China trade/tariff exposure across the manufacturing base
- Commodity (copper/aluminum) inflation and pricing pressure as the supplier pool widens
Moats, dependencies & bottlenecks
Moats
Nvidia/ODM qualification + vertical integration (cold plate to chassis) Qualified #2 on GB200 liquid cooling with in-house cold-plate/manifold/chassis; qualification is sticky per-generation but re-competed each platform.
Decades of fan/heat-pipe/vapor-chamber volume and multi-site capacity are hard to replicate quickly.
An advantage only while demand outstrips supply; erodes as Delta/Auras/Boyd/CoolIT add lines.
Dependencies
Demand / platform GB200/GB300/Rubin timing and liquid-cooling design wins drive the AI order book.
Ships through Foxconn, Quanta, Wistron/Wiwynn, Supermicro, Dell etc.; concentrated order flow.
A hyperscaler capex pause or digestion phase directly hits volumes.
Metal costs and precision-machining throughput swing COGS and delivery.
Geopolitical / operational US-China trade, tariffs and cross-strait risk sit under the footprint.
Advantages
- One of only two high-share qualified GB200/GB300 liquid-cooling suppliers
- Vertical integration across the thermal stack (cold plate -> manifold -> chassis)
- Incumbent scale in legacy thermal to fund and staff the liquid-cooling ramp
- Multi-country capacity giving both volume and some geographic hedging
Weaknesses
- Extreme valuation sensitivity (~56x FY2025 / ~44x TTM earnings) to any growth/margin slip
- Nvidia + few-ODM concentration
- FCF drag and execution risk from the heavy capex ramp
- Lower-margin, slow legacy air-cooling/consumer segment
Bottlenecks
- Cold-plate, manifold and chassis production capacity vs. surging rack demand
- Skilled precision-machining labor and yield/leak-proofing at liquid-cooling scale
- Supply of quick-disconnect couplings, pumps and CDU sub-components
- Qualification lead time for each new Nvidia/ASIC platform generation
Top signals & trends
Top signals
Bullish while sequential AI-cooling growth persists · Fastest read on order momentum; watch for any MoM deceleration.
Bullish if share holds vs Cooler Master/Delta · Each platform re-competes cooling suppliers.
Confirms liquid-cooling mix is accretive vs legacy fans.
More qualified suppliers = pricing/share pressure.
Trends
Rising rack power density (GB200 NVL72 ~120kW) makes liquid cooling mandatory.
Dollar content grows faster than unit volume.
Delta, Auras, Boyd, CoolIT, Nidec entering pressures long-run margin.
Adjacent TAM beyond direct-to-chip cold plates.
Ecosystem & competitor graph
Suppliers feed the company; customers pull from it. Line thickness shows the strength of each tie (supply-chain dependency, customer earnings contribution). Hover to isolate a tie.
Copper/aluminum + precision-machining vendors Base metals and CNC cold-plate machining — key COGS inputs.
Pumps/motors and CDU components used in liquid-cooling loops.
Quick-disconnect couplings / fluid-connector supply into liquid cooling.
Private connector/QDC suppliers for leak-proof liquid loops.
Reference platform owner (GB200/GB300/Rubin) — designs the racks AVC cools.
Lead AI-server ODM integrating AVC cooling into GB-class racks.
Major AI-server ODM customer.
Hyperscale server ODMs building liquid-cooled racks.
US AI-server OEM deploying liquid-cooled GB200 systems.
AI-server OEM; end demand for liquid-cooling modules.
Private (Taiwan). Market leader on batch-one GB200 liquid cooling (>50% share) — AVC's primary rival.
Taiwan power+thermal giant expanding into datacenter liquid cooling and CDUs.
Taiwan thermal-module peer scaling AI liquid cooling; direct share competitor.
US datacenter thermal + power systems / CDUs; owns much of the rack-to-facility cooling stack.
Private (US). Liquid-cooling/cold-plate specialist qualifying into GB-class racks.
Private (Canada, KKR-backed). Direct-to-chip liquid cooling pioneer entering GB200/GB300.
US liquid-cooling and enclosure/thermal-management supplier to datacenters.
Japan motors/fans + liquid-cooling pumps and CDUs; upstream and competitive.