New Delhi: Netweb Technologies India Ltd. could be one of the biggest beneficiaries of India’s rapidly expanding artificial intelligence (AI) infrastructure market, according to Bank of America (BofA), which has initiated coverage on the company with a ‘Buy’ rating and a target price of Rs 5,000.
The brokerage believes Netweb is well positioned to capitalise on rising investments in AI computing infrastructure, supported by its long-standing partnership with Nvidia, an asset-light business model and growing demand for high-performance computing solutions.
Based on the target price, BofA expects an upside of around 14% from the stock’s previous closing price of Rs 4,417.
Why BofA is bullish on Netweb Technologies
According to the brokerage, Netweb has established itself as India’s leading AI compute original equipment manufacturer (OEM), giving it a competitive advantage as enterprises, government agencies and cloud providers increase investments in AI infrastructure.
BofA highlighted that the company has spent nearly 15 years building its relationship with Nvidia and is currently the only Indian OEM to have deployed AI supercomputing systems powering some of India’s fastest supercomputers.
This partnership, combined with its expertise in designing AI infrastructure, places the company in a strong position to benefit from the country’s accelerating AI adoption.
India’s AI infrastructure market expected to grow rapidly
Bank of America expects India’s AI infrastructure market to witness significant expansion over the coming years.
The brokerage forecasts the market to grow at a compound annual growth rate (CAGR) of 30% to 40%, driven by rising demand for computing capacity across:
- Enterprise AI applications
- Government AI initiatives
- Cloud service providers
- High-performance computing (HPC)
- Sovereign AI infrastructure
As organisations increasingly deploy AI models and data-intensive applications, demand for advanced computing systems is expected to rise sharply.
Asset-light model offers a competitive advantage
One of the key strengths highlighted by BofA is Netweb’s asset-light business model.
Unlike companies that invest heavily in building AI data centres or infrastructure assets, Netweb primarily focuses on designing, integrating and deploying AI compute solutions, while customers bear most of the capital expenditure.
The brokerage believes this approach allows the company to maintain higher capital efficiency while benefiting from the growing AI investment cycle.
Proprietary software and recurring customer base
BofA also pointed to Netweb’s proprietary software stack as another differentiating factor.
The software enhances profitability, particularly for lower-volume resellers, while enabling the company to offer integrated AI computing solutions.
Additionally, nearly 40% of the company’s revenue comes from long-standing customer relationships, providing recurring business and improving earnings visibility.
This stable customer base is expected to support sustained growth even as competition increases.
Massive opportunity in India’s server market
The brokerage expects India’s server market to expand significantly over the rest of the decade.
According to BofA’s estimates:
- India’s server market could grow from around $3 billion in 2023 to nearly $45 billion by 2030.
- Within this, the addressable market for specialist OEMs such as Netweb could increase to approximately $9 billion.
The rapid growth is expected to be driven by AI adoption, cloud infrastructure expansion and increasing investments in digital transformation across industries.
Strong earnings growth expected
Bank of America projects robust financial performance for Netweb over the next few years.
The brokerage forecasts both revenue and earnings per share (EPS) to grow at around 40% annually between FY26 and FY29.
Growth is expected to be supported by:
- A healthy order book
- Rising enterprise AI adoption
- Government-backed AI initiatives
- Sovereign AI infrastructure projects
- Private cloud deployments
- Expansion in high-performance computing
These factors are expected to drive sustained demand for the company’s AI computing solutions.
Risks remain despite strong outlook
While maintaining a positive outlook, BofA cautioned that certain risks could impact the company’s performance.
These include:
- Volatility in AI investment sentiment
- Sustained increases in memory prices, which could pressure margins
The brokerage noted that fluctuations in AI spending cycles and component costs remain important factors for investors to monitor.
Conclusion
With India’s AI ecosystem entering a new phase of investment and infrastructure development, Netweb Technologies is increasingly being viewed as a key beneficiary outside the traditional IT services space. Its strategic partnership with Nvidia, specialised AI computing capabilities, recurring customer relationships and asset-light operating model have positioned the company favourably for long-term growth.
However, investors should continue to track execution, order inflows and industry-wide AI spending trends, as these will play a crucial role in determining whether the company can deliver on the strong growth expectations outlined by BofA.