Recently, I’ve been looking into investment opportunities in server concept stocks and found that this field indeed warrants in-depth research.

Honestly, the explosion of AI infrastructure has thoroughly changed the landscape of the server industry. The entire industry chain can now be roughly divided into three main parts: complete machine assembly, infrastructure, and key components. Each segment has leading companies deploying strategies, and their competitive advantages vary quite a bit.

First, let’s talk about complete machine assembly. Foxconn, as the global contract manufacturing leader, has become the core supplier for GB200 and other cabinet systems through deep ties with NVIDIA, and its vertical integration capability is outstanding. Quanta, with its R&D strength, mainly serves mega clients like Google, AWS, and Meta. Wistron is somewhat unique, focusing 100% on data centers, especially with advantages in ASIC servers and liquid-cooled cabinet integration. On the US stock side, Celestica has strong differentiated competitiveness in manufacturing 800G switches and Google TPUs, while Vertiv is the absolute leader in liquid cooling and thermal management.

These five stocks are what I consider the most worth paying attention to in the server concept sector: Foxconn, Quanta, Wistron, Celestica, and Vertiv.

Looking closer at Celestica’s performance, this Canadian EMS giant’s orders in the AI data center field are indeed growing rapidly. Revenue for the first three quarters of 2025 reached $3.19 billion, up 28% year-over-year; non-GAAP adjusted EPS was $1.58, up 52%. Wall Street’s 12 analysts’ average 12-month target price is $374.50, with a high of $440 and a low of $305, representing a potential upside of 22.44%. However, this growth projection seems relatively conservative.

Vertiv’s situation might be even more worth watching. As a global leader in thermal management, its leadership in liquid cooling technology aligns perfectly with the most needed area in the AI era. In Q3 2025, net sales were $2.68B, up 29% year-over-year; operating profit was $517 million, up 39%. More importantly, its order backlog is as high as $9.5 billion, providing excellent visibility for future revenue forecasts. The 17 Wall Street analysts’ average target price is $206.07, with a potential upside of 27.38%.

In Taiwan stocks, Quanta’s Q3 2025 revenue is NT$500 billion, up over 20% annually; net profit for the quarter exceeded NT$15 billion, with EPS around NT$4.26. For the full year, revenue approaches NT$1.9 trillion, with a cumulative net profit of NT$68 billion, and diluted EPS of NT$17.37. Management has raised the 2025 guidance, expecting AI business to continue as a growth engine into 2026. Morgan Stanley maintains an “Outperform” rating with a target price of NT$330.

Wistron’s growth rate might be the most astonishing. For 2025, consolidated revenue reached NT$950.6 billion, a record high with a 163.68% increase. December’s monthly revenue was NT$104.29B, up 143.86%; annual after-tax net profit was NT$51.1 billion, with EPS soaring to NT$275.06, doubling. The company is actively expanding production in the US and Mexico, with order visibility extending into 2027, laying a solid foundation for continued growth in 2026.

As the leader with over 40% global market share in AI servers, Foxconn’s estimated full-year 2025 revenue will surpass NT$8.1 trillion. In the first three quarters, revenue was NT$5.5 trillion, up 16%; net profit was NT$144.1 billion, up 35%. Management estimates that AI-related revenue will reach the trillion-yuan scale in 2026. The average target price from Wall Street and domestic institutions is NT$306, with a high of NT$444 and a low of NT$245. At the early January price of about NT$236, there’s still a potential upside of 29.66%.

But it must be clearly stated—these server concept stocks carry significant risks. First, many of the leading companies already have high P/E ratios, and market concentration is very high. Second, as investors shift focus from revenue growth to profitability, shorter depreciation cycles and rising power costs may suppress some companies’ profits. Most critically, if there are signs of a bubble in AI or if investors shift from growth to profit validation, these stocks could experience sharp declines.

Factors to watch in 2026 include: whether cloud service providers’ investments in AI infrastructure meet expectations, progress in non-x86 architectures and self-developed ASIC chips, development of agent systems and edge AI, the localization of AI chips in China and supply chain diversification, US regulatory changes and tariff pressures, and the progress of de-speculation in the market.

In short, server concept stocks still have opportunities in 2026, but it’s no longer a “buy and rise” era. Companies with liquid cooling tech, high-density computing solutions, and deep collaborations with chip giants may continue to be favored, but stock selection and risk management are now much more challenging. Do thorough homework before investing—don’t get blinded by the rally.