Compal Surges on AI Server Push, Foreign Investors Buy Over 100,000 Shares as Weekly Gain Exceeds 10%

Compal Electronics (2324-TW) is accelerating its AI server business, anticipating double-digit quarter-on-quarter growth in server revenue for the third quarter. This momentum is expected to continue into the fourth quarter, with full-year server revenue projected to reach 10% of total revenue. The company aims to increase this ratio to 30–40% in 2024, fueling a weekly stock price surge of over 10% and prompting foreign investors to buy more than 100,000 shares.

Compal’s stock rose 18.19% this week, hitting the daily trading limit on Wednesday (12th) and Friday (14th). It closed at NT$43.2 on Friday, reclaiming the NT$40 threshold and surpassing all moving averages. The three major institutional investors bought a net total of 118,800 shares this week, with foreign investors accounting for 108,000 shares over three consecutive trading days.

In Q2, Compal increased its server revenue share to a high single-digit percentage of total revenue. Driven by demand from customer NeoCloud, AI servers accounted for 70% of total server revenue. The company expects strong server momentum to continue in the second half, with full-year server revenue share reaching 10% and targeting 30–40% in 2024.

Currently, NeoCloud is the primary customer, but Compal aims to diversify its client base in 2024 by entering Tier 1, Hyperscale, and major Cloud Service Providers (CSPs).

To meet strong customer demand, Compal is expanding production capacity in Taiwan, Vietnam, and the United States. In Taiwan, the Daxi plant in Taoyuan began operations this Tuesday (11th), focusing on automated production for L10 and L11 models. It is expected to reach full capacity in the second half of 2024, serving NeoCloud. The L6 plant in Vietnam is the main production hub in Southeast Asia, currently operating four SMT lines with plans to add six more, totaling ten lines, which will be completed soon.

Two new facilities in Texas, USA, are scheduled to begin trial production by the end of 2023 and commence full operations in Q1 2024. These plants will produce L6 to L11 products and serve Hyperscale and Enterprise-level clients. Related demand is expected to ramp up from late 2023 to early 2024.