Dell Sees AI Servers Doubling to $50B in 2026

Posted on April 15, 2026June 30, 2026 by io-fund

Dell reported some of the strongest AI revenue numbers in the industry last quarter with AI server revenue up 342% YoY to $9.0 billion, orders up 1,906% YoY to a record $34.1 billion and backlog up 177% QoQ to a record $43 billion. This strong AI momentum in Q4 is underpinning Dell’s FY27 guidance for AI server revenue to more than double to $50 billion, which management believes they can achieve while maintaining margins in the mid-single digits.

Driven by this AI strength, Dell guided for revenue to accelerate nearly five points to 23.3% YoY to $140 billion, emphasizing that they have the supply to achieve this guide in full for the entire year, despite supply constraints facing the industry, notably in memory. Dell also noted that the demand picture remains robust, and more supply would leave potential for more growth.

Below, we look into Dell’s AI server metrics, key risks ahead for growth and margins, and potential headwinds on the PC side.

Robust AI Server Growth, Backlog up 949% YoY

It’s hard to deny that Dell’s AI server guidance and key metrics were the strongest parts of its Q4 report, with the company guiding for just over 100% growth to $50 billion in AI server revenue this year and both orders and backlog up well over 100% QoQ. However, the predominant question for Dell’s stock is server margins, which Dell stated will be in the mid-single digits.

Starting with backlog and orders, perhaps the top two metrics this quarter, it’s hard to understate the strength of demand that Dell is seeing. Orders rose 1,906% YoY and 177% QoQ to a record $34.1 billion in the quarter, driving backlog up 949% YoY and 134% QoQ to a record $43 billion.

Dell clarified that the majority of the backlog consists of Grace Blackwell servers, while Vera Rubin is taking a larger share in its five-quarter pipeline but is not yet appearing in orders, likely due to the system timing in the second half of the year along with potential rumors of slight delays. Management also expects a smoother transition from Blackwell to Rubin, letting them ramp “with more velocity and speed” into calendar 2027. Here is what was stated: “So on the $43 billion backlog, Samik, it is predominantly overwhelmingly Grace Blackwell. There is no Vera Rubin [indiscernible] pipeline. The largest percentage of our 5-quarter pipeline is a combination of Grace Blackwell and Blackwell where we're seeing a rise in x86 Blackwell in the 5-quarter pipeline, driven primarily by enterprise deployment, air being the #1 consideration.”

Importantly, Dell noted that the dollar value of their five-quarter AI server pipeline has never been larger, despite the robust order activity and $34 billion in orders received, highlighting the breadth of demand from enterprises, CSPs and sovereigns.

While these both add a large layer of confidence in Dell’s $50 billion AI server revenue guidance for FY27, up 103% YoY, the question moving forward is, what does this mean for growth?

While Dell did guide for Q1’s AI server revenue to be $13 billion, up 620% YoY and 45% QoQ (some of the strongest growth across AI at the moment), its full year guide says this will be its max quarterly run rate. Management had explained at Morgan Stanley’s TMT Conference after earnings that they have “committed to $13 billion of Q1, which is effectively $1 billion a week of shipments going out the door.” Annualizing that gives $52 billion, which suggests there will be minimal QoQ growth moving forward as the max run rate, or that they will be some degree of lumpiness, potentially tied to the upcoming transition from Blackwell to Rubin.

There is also potential for orders to normalize lower moving through FY27 – Dell is likely quite capable of handling a high degree of orders, yet its backlog exiting Q4 already represents more than 85% of its AI server revenue guide, meaning continuous orders at this level ($10-30B) each quarter could cause its backlog to grow faster than it can get servers out the door.

Dell also has made clear that there isn’t enough supply to meet the level of demand they see: “If we were to look at some of the demand asks that we would see from customers today and replicate that for a full 12 months, there isn't enough supply to fulfill that.” While Dell emphasized that it has the supply to satisfy its entire guidance for the year (not just Q1), some of the constraints that we see on the memory side in particular may make it increasingly difficult to ramp server revenue much higher.

It’s Not Only About the AI Server Margins, but Also Storage

As mentioned above, Dell’s story mainly circulates around AI server margins, which the company is aiming to maintain in the mid-single digit range. Regardless of where mid-single digit is for Dell (whether it’s 5% or 7%), the fact is that AI servers lag its broader ISG segment on operating margins and could present a larger headwind as its share of revenue increases. However, Dell is offsetting this server drag via storage, its highest margin business where growth has been strong and attach rates are rising.

COO Jeff Clarke explained that Dell has “operated throughout the quarter and over the course of the year in that mid-single-digit operating income [for AI servers]. With what we see in front of us, there's no reason to change that. That is our guidance of where we can operate this business, and we're going to continue to grow it.” Clarke emphasized again in a later question that Dell believes it can maintain mid-single digit margins while transitioning from Blackwell to Rubin, noting that the current $43 billion backlog “will ship at mid-single digits” as well.

Looking more acutely at margins, Dell’s ISG segment operating margin was 14.8%, down 3.3 points YoY, with AI servers accounting for nearly 46% revenue share in the segment, up from less than 18% a year ago; Dell said pricing efforts allowed server margins to stabilize despite higher input costs.

For the entire fiscal year, ISG operating margin was 11.7%, down 1.1 points, with AI servers accounting for 41% of revenue, up from 21%. Based on management’s guide for $50 billion in AI server revenue and ISG growth of mid-40%, AI servers could exit the year at ~57% of ISG revenue, potentially creating a larger margin overhang by next Q4; quick back-of-napkin math assuming a 6% AI server margin roughly projects ISG operating margin dropping as low as 9.7% in FY27 all else unchanged.

Another challenge with maintaining margins is that Dell faces intense AI server competition, not only from Super Micro, guiding to a similar $40 billion in revenue with operating margins currently at 3.7%, but also from Taiwanese ODMs. Dell faced a question on the latter at Morgan Stanley’s TMT:

Erik Woodring, Morgan StanleyErik Woodring, Morgan Stanley

How do you make sure that you protect yourselves against some of the lower-priced Taiwanese ODMs, making sure that you can defend what you've done and stay with the customers that you have and grow with them?

David Kennedy, Dell CFODavid Kennedy, Dell CFO

“Back to your second part of the question, look, again, our value as we look at the production cycle here from the L11 scale and beyond, those engineering standards, those activities, I'm sure we might touch on OpEx in our P&L later. But within our OpEx framework, we are making sure we're investing, investing in our go-to-market teams. So as AI opportunities expand in the enterprise, we're building out the right pod structures and the right capacity to go execute that. But also two, giving Arthur Lewis and his team, the engineering capability, the labs and the investment. So they're not working just on, let's say, Vera Rubin, but the next gen beyond that and beyond that. We're ahead of the game right now. Our job is to stay ahead. So we maintain the value that we can find in our P&L.”

Dell’s answer here is incomplete without one other quote from management at BofA’s conference, where they explained that they “can deliver hundreds of these racks in a given week like clockwork and have them show up and within 24 to 36 hours, they're up and running and they're generating money for the customer,” where “competitors don't seem to be able to do that reliably.”

This speed and reliability is key as the Taiwanese ODMs may beat out Dell when it comes to cost at scale, yet Dell’s advantage lies in delivering full rack-scale systems that can almost immediately be monetized by customers. It is also a key advantage in serving the enterprise customer pipeline, now extending to 4,000 customers in its installed base, up from 3,300 in Q3. This also may play a key role in helping Dell mitigate AI server margin erosion moving forward while serving enterprise customers, as competitive pressures on the cost side and potential undercutting to gain share are unlikely to let Dell drive margins higher at the time being.

However, Dell is leaning on storage to help preserve ISG operating margins in the face of this growing AI-related margin pressure. Dell’s storage IP portfolio, including its PowerMax, PowerScale and PowerFlex, “is the biggest lever as to why we say our core margins, excluding AI, can show a bit of expansion” with ISG operating margin up 2.4 points sequentially to 14.8%. This was driven by storage revenue up 20% QoQ in its seasonally strongest quarter (a slight improvement versus the 18% QoQ last Q4) and 2% YoY, outperforming the market.

Looking ahead, Dell expects storage to be a primary lever in helping keep margins strong in the face of headwinds from increased AI server share and rising memory costs. This is because Dell is seeing stronger storage attach rates for AI servers in enterprise customers, and strong demand for storage products as inference expands. Management also sees its IP portfolio growing mid-single digit YoY in FY27 and taking a larger mix this year:

Benjamin Reitzes, Melius ResearchBenjamin Reitzes, Melius Research

Nice execution here, guys. I'll echo that. My question is on storage. It sounds like it's turning a little bit. You beat the Street by a little bit, 2%. And then you said, I believe that it will grow in the mid-singles for the year, and it looks like it may outgrow servers in the back half of the year. So can you just talk about what's really going on with storage, your highest margin business? Is it really turning? Is it going to be a contributor to mix in the upcoming year that allows you to keep gross margins pretty flat for the year in a tough component environment?

Jeffrey Clarke, Dell COO Jeffrey Clarke, Dell COO

Sure, Ben. Look, we're excited about our storage business. Again, we're reporting that on an orders basis, our Dell IP portfolio grew double digits. That's the entire portfolio. PowerMax, PowerStore, PowerScale, ObjectScale and our data domain platforms all grew double-digit demand. Our all-flash grew double-digit demand. It grew in all regions, and we acquired new customers. PowerStore grew its 8th consecutive quarter, 7 of those — the last 7, double digit.

Half of those new customers that we are winning are new to PowerStore and nearly 30% are new to Dell buying storage. We saw tremendous demand for our unstructured products as AI inference and AI continues to grow, grow, grow. Our Dell IP portfolio is now a greater percentage of the mix year-over-year. We expect it to grow FY '27 over '26, it will be a greater percentage of mix next year than this year. That's part of the profit contribution that David has outlined in our guidance.

Memory Costs, PC Demand and Pull Ahead Dynamics

We touched upon some of memory headwinds and potential significant PC unit volume shrinkage the market faces this year in our Silicon Motion analysis, Silicon Motion: Strong Consumer SSD Demand, Trying to Move into AI Enterprise Markets for 2027-2028, with Dell’s management similarly pessimistic on PC growth.

Management explained that they foresee PC units declining in the range of (11%) to (12%) this year, at odds with the refresh cycle underway, though emphasized that they do “expect the back half of the year to be deeper, probably high teen double-digit negative growth.” To note, this is slightly more pessimistic than estimates from IDC and Gartner calling for (11.3%) and (10.4%) decline in unit volumes this year. Dell also outlined a bit of a pull ahead dynamic, with customers are beginning to understand that quotes tomorrow or next quarter are likely to be higher than price quotes today, spurring some purchasing activity.

This challenging demand environment has the potential to weigh on CSG growth especially in 2H, though Dell expects its pricing activities to allow them to hit their CSG revenue guidance of 1% YoY even if price increase take unit growth even lower.

Management pointed out that their price quotes “are valid for the shortest period of time they've ever been. And we're reducing promotions and all sorts of special pricing going forward. … In PCs, we purposely delayed implementing that price move to stay in the hunt to take share and to drive growth, which will serve us for the long run. And then when we made the change on January 6, it wasn't 90 days later, it was that day we stabilized margins.” Management had also clarified that CSG’s higher deal volumes means its repricing efforts take longer to flow through, meaning it will not have as immediate an impact as servers on growth.

Dell shared a bit on memory costs, noting that Q2 is estimated to rise 20% to 50%, Q3 up 5% to 15%, and Q4 up 5% to 10% for combined DRAM and NAND. Management expects these industry estimates to be in the ballpark, explaining that they have LTAs and capacity agreements in place and that they have experience budgeting prices as needed. However, current forecasts point to conventional DRAM up 58-63% QoQ and NAND up 70-75% QoQ, far ahead of management’s expectations and suggesting that memory prices may still remain a tougher constraint through the summer and beyond. Even if Dell does have the ability within LTAs to avoid some of these increases, broader demand destruction may still occur and impact growth.

Financials

Revenue Growth Accelerates to 39.5% in Q4

Dell’s Q4 revenue grew by 39.5% YoY and 23.6% QoQ to $33.4 billion driven primarily by outperformance in AI servers. Revenue growth accelerated by 28.7 percentage points from 10.8% YoY growth in the previous quarter and significant improvement from the (9.3%) QoQ decline in the previous quarter.

Management also provided strong Q1 guidance of $34.7 billion to $35.7 billion, implying YoY growth of 50.6% and 5.5% QoQ at the midpoint. Analysts currently expect Q1 revenue to grow by 51.8% YoY to $35.5 billion and will moderate to 17.6% and 26.6% growth in the next two quarters.

FY2026 revenue ending January grew by 18.8% YoY to $113.5 billion. Management provided a strong FY2027 guidance of $138 billion to $142 billion, implying YoY growth of 23.3%, with one analyst pointing out that Dell is “adding $30 billion more on top line with very little incremental OpEx.” Analysts currently expect FY2027 revenue to grow by 24.8% YoY to $141.7 billion and will decelerate to 6.9% and 4.5% growth in the next two years.

Key Segments

ISG Revenue Grew by 73%

Infrastructure Solutions Group (ISG) Q4 revenue grew by 73% YoY and 39% QoQ to $19.6 billion primarily driven by very strong AI server revenue growth. It marked the eight consecutive quarter of double-digit revenue growth for the ISG segment. ISG revenue is expected to grow over 100% in Q1, primarily driven by strong AI server revenue.

From Q4, the company has started to bifurcate servers and networking revenue into AI optimized server revenue and traditional servers & networking revenue. Q4 AI revenue grew by 342% YoY and 60% QoQ to $9.0 billion. While the traditional servers & networking revenue grew by 27% YoY to $5.85 billion and storage revenue grew by 2% YoY and 20% QoQ in its seasonally strongest quarter to $4.8 billion.

Management expects Q1 AI revenue to be $13 billion, implying a YoY growth of about 620% and 45% QoQ. FY2026 AI revenue grew by 166% to $24.68 billion, and management expects AI revenue to grow 103% YoY to about $50 billion in FY2027.

AI orders grew by 1906% YoY and 177% QoQ to a record $34.1 billion in Q4. While AI shipments grew by 352% YoY and 70% QoQ to $9.5 billion. The company’s AI server backlog grew by 949% YoY and 134% QoQ to a record $43 billion.

CSG Revenue grew by 14%

Client Solutions Group (CSG) Q4 revenue grew by 14% YoY and 8% QoQ to $13.5 billion. Commercial revenue grew by 16% YoY and 9% QoQ to $11.6 billion. It was the sixth consecutive quarter of growth and demand up for the eighth quarter. The company is witnessing growth across geographies, with strong large enterprise demand and traction in the lower end of commercial markets. Consumer revenue was flat YoY and up 1% QoQ to $1.88 billion with demand up for the second consecutive quarter, supported by strength in gaming. Management expects CSG revenue to be up roughly 2% YoY in the next quarter.

Margins

The market was growing concerned that rapidly rising memory costs would squeeze on Dell’s margins (“you're supposed to miss numbers, by the way, when memory prices go up”), yet Dell’s margins are among the highest they’ve been since we began tracking the stock. This is quite impressive given the AI server and memory headwinds, with storage being a key piece of this margin strength despite being a much smaller portion of revenue at $4.8 billion this quarter.

Q4 gross profits were $6.7 billion or 20.2% of revenue compared to $5.7 billion or 23.7% in the same period last year. The lower margins reflect higher proportion of AI revenue mix.
Q4 operating income grew by 43.2% YoY to $3.1 billion primarily driven by operating leverage. Operating margin was 9.3% compared to 9% in the same period last year.
Q4 net income was $2.3 billion or 6.8% of revenue compared to $1.5 billion or 6.4% of revenue in the same period last year.

Q4 Adjusted EPS grew by 45.1%

The company’s Q4 adjusted EPS grew by 45.1% YoY to $3.89 primarily driven by operating leverage. Analysts expect Q1 adjusted EPS to grow by 89% YoY to $2.93 and will decelerate to 27.8% and 20.5% in the next two quarters.

Looking ahead, FY2027 adjusted EPS is expected to grow by 24.5% YoY to $12.82 and 13.8% in FY2028.

Cash Flow and Balance Sheet

Similar to margins, Dell’s cash flows were equally as strong, with operating cash flow margin expanding by double digits and free cash flow following. Cash flow margins were also around the highest they’ve been over the last three years.

Q4 operating cash flow was $4.7 billion or 14% of revenue compared to $585 million or 2.4% of revenue in the same period last year.
Q4 adjusted free cash flow was $5.1 billion or 15.2% of revenue compared to $474 million or 2% of revenue in the same period last year.
The company had a high debt of $31.5 billion and cash & investments of $13.3 billion at the end of Q4. The company repurchased shares worth $1.85 billion and paid dividends of $346 million in Q4.
The company’s inventories rose 50.2% QoQ to $10.4 billion in Q4 primarily to support the strong AI demand.

Conclusion

Dell’s Q4 saw some of the strongest AI revenue growth across the AI industry with AI server revenue up 342% YoY to $9 billion, while orders surged 1,906% YoY to a record $34.1 billion. This order momentum drove Dell’s AI server backlog to a record $43 billion, with it consisting primarily of Grace Blackwell systems, which could be quite helpful if the upcoming Vera Rubin generation sees a delay. Importantly, Dell also has supply secured to satisfy its guidance in full for the entire year, a key advantage considering the memory and component shortages persisting across the industry.

Moving down the line, Dell’s margins and cash flows stand out as they both approached the highest levels over the last three years, despite AI server margin headwinds and rising memory costs, with Dell leveraging its IP storage portfolio growth to keep margins strong. Growing storage attach rates through FY27 provides a large lever to keep margins strong through the rest of this year even with AI servers guided to grow >100%.

Damien Robbins, Equity Analyst at I/O Fund contributed to this analysis.

Please note: The I/O Fund conducts research and draws conclusions for the Fund’s positions. We then share that information with our readers. This is not a guarantee of a stock’s performance. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis.

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Silicon Motion: Strong Consumer SSD Demand, Trying to Move into AI Enterprise Markets for 2027-2028

Posted on April 10, 2026June 30, 2026 by io-fund

Leading SSD controller supplier Silicon Motion (SIMO) is forecasting record revenue in 2026, yet the growth story still appears driven primarily by its more established markets across mobile, PC and automotive rather than by a major breakout in AI or data center.

In the near-term, SIMO is guiding sequential revenue growth throughout the year, primarily driven by the mobile revenue segment with management stating: “We expect continued strength across nearly all our product segments with a particular emphasis on mobile where we expect significant outperformance due to continued market share gains.”

That said, management has made it clear execution is dependent in part on securing NAND supply on a stable basis, with higher input costs passed through to customers.

SIMO has a handful of notable customer wins, aside from working with the leading NAND flash and SSD suppliers. The company is supplying controllers for Nvidia’s BlueField DPUs in the second half of the year, along with several NVLink and Ethernet switch solutions. Analysts also implied that the company has won a role in Google’s ASICs project although management did not directly confirm the customer name.

Today, SIMO appears to be more adjacent to the action around NAND prices surging rather than being in the center of it. While NAND suppliers that own the flash content are seeing the benefits of higher average sales price per gigabyte and higher bit shipments, instead, SIMO sells the controller silicon and firmware that manages the NAND which does not benefit directly from pricing upside.

Over time, that could change with key products such as enterprise boot drive storage, MonTitan enterprise SSD controllers and PCIe6 MonTitan controllers. Below, we discuss key products that could help SIMO pivot toward the lucrative and highly supply-constrained AI memory market.

Brief Product Overview

Silicon Motion supplies a range of high-performance NAND flash controllers, and is the leading global supplier of PCIe Gen4 and Gen5 SSD controllers used in PCs, client devices, and enterprise/data center applications, along with eMMC and UFS controllers for smartphones and IoT devices. The company’s controller chips and firmware help manage how data is stored and accessed across these devices.

SIMO is heavily exposed to the consumer/client markets, with eMMC/UFS controllers driving 40-45% of revenue in fiscal 2025, with likely a large portion of SSD controller revenue (45-50% of revenue) coming from the two end markets.

However, Silicon Motion is looking to make solid inroads into the data center heading into 2027, serving merchant GPUs with Nvidia’s new BlueField DPU on its Vera Rubin generation with boot-storage, which helps to start and manage the system. Although this is not nearly as critical (or as valuable) as SSD like what SanDisk offers, which is the main data storage, supplying the boot-storage marks a shift for SIMO as their products will now be in AI servers.

There are also some other AI-driven tailwinds within compute and enterprise SSDs, being served by its MonTitan platforms in the second half of 2026 for QLC and TLC NAND for AI storage applications. These SSD controllers will help to solve the data storage challenges that AI servers face by helping them feed data and access data efficiently.

The company supplies the leading flash manufacturers including Kioxia, Micron, SK Hynix/Solidigm, Samsung, SanDisk, and China’s YMTC. Outside of memory suppliers, Amazon is a key customer and Nvidia.

Moving into Data Center with MonTitan and Enterprise SSDs for AI Servers

For its AI-oriented product portfolio, SIMO offers a handful of high-performance enterprise SSD controllers in 8-channel and 16-channel configurations, as well as its MonTitan PCIe Gen5 SSD development platform. MonTitan targets data center and enterprise boot drive storage needs, featuring an SSD controller ASIC, reference design kits and enterprise firmware, allowing customers to optimize designs to meet their performance needs.

SIMO began qualification of high-performance TLC compute SSDs on MonTitan at multiple customers in Q4, with qualification expected to progress through the first half of calendar 2026 and commercial ramp occurring in 2H. Additionally, SIMO expects to begin qualifications with multiple customers this year for QLC storage SSDs.

MonTitan is expected to be a core growth driver for SIMO once the ramp begins in 2H, with management already guiding for the platform to reach 5-10% of revenue exiting 2026, or ~$60 to $120 million run rate based on current estimates for $1.27 billion annual and $335 million revenue in Q4.

SIMO is also planning to tape out its first 4nm PCI Gen6 version of MonTitan (as current controllers are 6nm) this year, targeting hyperscalers, NAND flash manufacturers, storage system providers and CSPs. The new 4nm solution is expected to drive growth in 2027 and 2028, with management noting they already have secured a design win expecting to ramp significantly in 2028.

Ramping for Vera Rubin’s BlueField DPU in 2H 2026

Silicon Motion is expecting to see tailwinds from merchant GPUs arise in the second half of 2026, from its involvement within Nvidia’s Vera Rubin on DPU boot drives, as well as its NVLink/Ethernet switch roadmap. Management discussed they were involved with other potential customers for enterprise boot drive solutions including a leading search engine firm, with analyst commentary implying that Google may have already been won as a customer, though this was not confirmed. However, SIMO faces two main headwinds at present that could push this growth story to the back burner – timing of the ramp and PC/mobile headwinds, and challenges procuring NAND.

SIMO explained in Q4’s call that they kicked off volume shipments to Nvidia in the quarter for its current DPU generation, adding that they are also working with the GPU leader “to qualify the next-generation version of their DPU as well as for several NVLink and Ethernet switches of their new GPU/CPU platform that are expected to launch in the second half of 2026.” Management added that the next-gen DPU and switch both require higher capacities, with much higher unit volumes and ASPs, unlocking a new growth opportunity in the back half of the year through 2027.

This likely corresponds to Nvidia’s upcoming BlueField4 and BlueField4 STX platform announced at GTC, as well as its Spectrum-6 switch family. The STX rack in particular underpins Nvidia’s in-house ‘Inference Context Memory Storage’ platform, an Ethernet-attached flash SSD tier optimized for KV cache at the pod level to accelerate large-context inference. For more on the ICMS platform, refer to our SanDisk analysis here: SanDisk: Shares Up 559% In 2025 On NAND Flash, Enterprise SSD Tailwinds.SanDisk: Shares Up 559% In 2025 On NAND Flash, Enterprise SSD Tailwinds.

SIMO provided a brief view on the products it is supplying for Nvidia and their role at GTC: MonTitan SSDs for the ICMS platform and KV cache extension, as well as for near-GPU high performance storage; enterprise SSD controllers for compute-optimized, nearline SSD and warm data storage with TLC and QLC SSD support; and PCIe NVMe boot drives and boot drive controllers.

Given the new nature of this growth opportunity, analysts questioned about the revenue opportunities from BlueField DPUs/boot drives, and how it will play out this year and into next. Management explained that they expect the DPU/boot drive volume to be “very meaningful in 2026” with revenue around $50 million, but next year to be “much higher” as the NVLink and Ethernet switches see “more volume in 2027.”

This would imply DPU revenue contribution remaining around <5% of revenue in 2026, based on current estimates for $1.27 billion in annual revenue, though commentary for much higher growth with product ramps weighted next year suggests management has already has solid visibility into the business potentially becoming a much more meaningful topline driver by the end of next year.

However, the discussions also shed light on some primary headwinds SIMO faces. First, the main challenge comes down to timing, with the ramp more weighted in the back half of 2026 and into 2027, whereas SIMO must currently navigate challenging PC and mobile markets. Second, growth depends on NAND procurement which must be bought at market prices, margins must be passed through to customers, and it is not the sole controller supplier for DPUs.

Headwind #1: Timing

SIMO did set the stage for a strong year, expecting record revenue and sequential growth in each quarter with Q1 being the lowest for the year, a strong statement considering growth headwinds facing the mobile and PC markets from rising memory costs, with volumes expected to decline YoY in both end markets.

This is why timing may be the most challenging aspect to SIMO’s thesis, as it is working to ramp its presence in the data center, yet these initial contributions may not be material enough to overcome PC and mobile challenges as the year progresses.

As noted above, SIMO is forecasting Q1 to be the lowest quarter of the year, primarily impacted by typical seasonal weakness in client SSDs with mobile expected to significantly outperform. Guidance was $292 million to $306 million, or $299 million at midpoint for roughly 7.4% QoQ growth, counter to typical seasonality but decelerating from 15.1% QoQ in Q4.

Current estimates point to SIMO’s sequential growth decelerating further to 2.7% in Q2 and remaining in the low/mid-single digit range through year-end, overall marking a high teens deceleration from Q3’s peak on current estimates.

A key factor behind the soft forward QoQ growth is likely the PC/mobile headwinds given the significance of eMMC/UFS controller and client SSDs in terms of dollar growth and revenue contribution.

Recent projections from Gartner and IDC point to a worsening environment for PCs. IDC had originally forecast an (8.9%) decline in shipments in 2026 in its pessimistic scenario from December 2025, yet it now projects an (11.3%) decrease in shipments this year as rising memory costs force price hikes that bite into demand. Gartner sees a similarly woeful year for PCs, forecasting a (10.4%) decline, with analysts there saying this would represent the “steepest contraction in device shipments witnessed in over a decade.”

For smartphones, both of the two groups forecast a similarly challenging year. IDC is forecasting a (12.9%) decline in the smartphone market in 2026, a rather substantial revision lower from its December projection for just a (5.2%) decline. For comparison, Gartner projects an (8.4%) decline. This follows low-single digit growth in 2025.

SIMO does expect to outperform both markets and deliver growth as it benefits from market share gains and improved ASPs, explaining that they will “get the benefit of both higher share and higher ASPs this year in spite of any sort of macro issues around PC unit volumes.”

However, it is still worth pointing out that there is no guarantee that it will be able to flawlessly navigate what could shape up to be some of the worst growth in PCs more than a decade and potential double-digit unit declines. If these supply chain difficulties persist and cause inventory buildups at OEMs, consumer/client NAND demand could be impacted, and SIMO’s limited data center opportunities (where NAND demand is likely to remain relatively well insulated from rising storage demand) may not be enough to offset growth and margin headwinds.

Headwind #2: NAND Procurement

While the PC and mobile headwinds are two challenging external headwinds, perhaps the most challenging internal headwind SIMO will face comes down to NAND supply. This is because the company has to procure NAND itself at market price, and then work to pass the costs on to customers, without benefitting from some of the end-unit pricing power that its customers are seeing:

“We need to procure the NAND and NAND price at the market price. So we have to work out with the customer, we can pass through the cost increase to the end customer. So it is challenging but ongoing process quarter-by-quarter. It definitely will impact some of our gross margin but we manage the margin pass-through. So I think because even the customers, they have at least 2 to 3 supplier, so they're based on the price and based on the supply and depends the percentage.”

The challenge here is that NAND prices reportedly rose ~90% QoQ in Q1, and were estimated to increase ~20% QoQ in Q2 in early February, yet the latest data suggests prices could rise 70-75% QoQ in Q2. Recent reports from Korea also suggest Samsung is doubling prices sequentially in the second quarter, implying that pricing is not yet slowing down. Simply put, when input costs rise 70% or 90%, prices must follow at a similar or faster rate in order to preserve margins.

Considering the boot drive solution is a new product line with minimal revenue contribution until 2H, outsized pricing headwinds this early in its ramp phase could weigh substantially on gross and operating margins, which are already quite thin in the mid-40% and 13% range. This compares to its customers like Micron who are pushing above 80% and 76% next quarter as major beneficiaries of the price increases.

Management also flagged that growth will be dependent on its ability to secure NAND supply ‘stably’, another major challenge considering SIMO has two NAND suppliers – stated as Kioxia and WDC (though likely to now be SanDisk). Management explained that one of these suppliers is secure, yet the other is not, which could impact their ability to secure stable supply at favorable prices, especially if the second prioritizes allocations to the highest bidder. To note, Kioxia announced in January that its NAND output for 2026 was essentially fully sold out.

Financials 

Revenue Growth Accelerates to 45.7% in Q4 2025 

Silicon Motion’s Q4 2025 revenue grew by 45.7% YoY and 15.1% QoQ to $278.5 million. Revenue also beat estimates by 6.7%, reflecting the continued strength in mobile business and strong growth in the PCIe 5 SSD business. Revenue growth accelerated by 31.8 percentage points from 13.9% YoY in Q3 2025. Though sequential growth slowed from 21.8% in Q3, it was better than the decline of (10%) in the same period last year.  

Management also provided a strong Q1 revenue guide of $292 million to $306 million, implying a YoY growth of 79.6% and 7.4% QoQ at the midpoint. Management expects continued strength across its products with a particular emphasis on mobile end markets, where it expects significant outperformance driven by continued market share gains.

2025 revenue grew by 10.2% YoY to $885.6 million. Analysts expect revenue growth to accelerate to 43.1% YoY to $1.27 billion in 2026. Management expects 2026 to be a record year, with revenue growing each quarter sequentially, supported by first-half momentum in eMMC and UFS products. To briefly recap, MonTitan enterprise SSD products are expected to scale in the second half of 2026 and contribute 5% to 10% of revenue by the end of the year, with strong growth anticipated in the years ahead.

Key Segments 

SSD Controllers 

SSD Controller sales increased by 25% to 30% QoQ and 35% to 40% YoY in Q4 2025, compared to an increase of 20% to 25% QoQ and a decrease of 0% to 5% YoY in Q3. Management expects client SSD controllers to ramp throughout the year, though the first quarter is seasonally weaker. They expect the new DRAM-less 4-channel PCIe 5 controller that was introduced last quarter to ramp significantly throughout 2026 and the MonTitan controller ramp is expected in the second half of 2026. 

For the full year 2025, SSD Controllers accounted for 45% to 50% of revenue and revenue declined by 0% to 5% YoY. 

eMMC + UFS Controllers 

The company’s eMMC (Embedded Multimedia Card) + Universal Flash Storage (UFS) controller sales increased by 0% to 5% QoQ and 50% to 55% YoY in Q4 2025, compared to an increase of 20% to 25% QoQ and 35% to 40% YoY in Q3 2025. 

For 2025, eMMC + UFS Controllers accounted for 40% to 45% of revenue and revenue increased by 20% to 25% YoY. Given the current backlog and customer outlook for 2026, management expects to significantly outpace the market and deliver another strong year of growth of the eMMC and UFS business despite the difficult market environment, with the two accounting for 35% to 40% of revenue in 2026.

SSD Solutions 

SSD Solutions revenue increased by 125% to 130% QoQ and 110% to 115% YoY in Q4 2025 compared to an increase of 15% to 20% QoQ and decrease of 40% to 45% YoY in Q3 2025. For 2025, SSD Solutions accounted for only 5 to 10% of revenue and declined by 10% to 15% YoY. 

The company’s boot drives are part of  its  SSD solutions, and this segment is currently growing rapidly due to the strong AI demand. 

Margins 

The company’s margins are improving; however, management expects slight pressure in Q1 primarily due to product mix, with improvement anticipated as the year progresses.  They expect gross margins to return to the target range of 48% to 50% as the year progresses, as the mix of newer products increases, including the PCIe 5 controllers and enterprise SSD solutions. 

Q4 gross profits grew by 56.2% YoY to $136.8 million with a gross profit margin of 49.1%. The adjusted gross margin improved by 320 basis points YoY and 50 basis points QoQ to 49.2%. The improvement in gross margin was primarily driven by the successful ramp of new products and a favorable product mix shift toward client PC products.  
The adjusted operating margin came at 19.3%, up 380 basis points YoY and 350 basis points QoQ. Management expects full year 2026 adjusted operating margin to improve despite the higher expenses this year, primarily driven by operating leverage.
Q4 net income came at $47.7 million or 17.1% of revenue compared to $21.6 million or 11.3% of revenue in the same period last year. The company benefited from the realized/unrealized gain on investments of $24.2 million in Q4 2025 compared to $0.1 million in Q4 2024.

Q4 Adjusted EPS grew by 45% 

The company’s  Q4 adjusted EPS grew by 44.8% YoY to $1.26. Analysts expect strong growth to continue and expect Q1 adjusted EPS to grow by 117.2% YoY and 75.9% in Q2 2026. Looking forward, adjusted EPS is expected to grow by 59.4% YoY in 2026 and 21.9% in 2027. 

Cash Flow and Balance Sheet 

The company’s cash flows have been lumpy, and the increase in inventory to support strong future growth has put pressure on cash flows.   

Q4 operating cash flow was $1.6 million or 0.6% of revenue compared to an operating cash outflow of ($6.2 million) or (3.2%) of revenue in the same period last year.  
Q4 free cash outflow was ($6.3 million) or (2.2%) of revenue compared to ($17 million) or (8.9%) of revenue in the same period last year.  
The company had cash of $201.8 million and no debt at the end of Q4 2025 compared to $198.6 million in cash and no debt at the end of the previous quarter. 
Inventories increased by 24.8% QoQ to $421.8 million to support the strong future growth.

 Conclusion

 SIMO is guiding for record breaking revenue in fiscal 2026 despite growing headwinds in the PC and smartphone markets from rising memory costs. Q1 is expected to the lowest quarter of the year for revenue with client SSDs seeing typical seasonal weakness, with sequential growth in each quarter thereafter. The company’s AI opportunities around Nvidia’s BlueField DPUs are expected to arise in the second half of the year and contribute roughly $50 million with a larger impact in 2027, while MonTitan is expected to quickly ramp in 2H to 5-10% of revenue.

Revenue growth will also hinge on SIMO’s ability to stably procure NAND supply to meet its end market demand, making increasing memory costs a point to navigate for growth.

An analyst on the call threw out 2027-2028 as potential timing for when the enterprise segment could get interesting. Our analysis points toward something similar, which is that 2026 may be a solid growth year for mobile and also PC yet is unlikely to be the year SIMO breaks out as a major enterprise AI story.

Given the growth we are seeing in NAND, we felt it was worth our time to look at this stock more closely, yet will put SIMO on the shelf for further review until end of 2026 to see if a few of these green shoots materialize in the AI market.

Damien Robbins, Equity Analyst at I/O Fund contributed to this analysis.

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Aehr’s Bookings Surge as Expected in Q3, Book-to-Bill of 3.5X

Posted on April 10, 2026June 30, 2026 by io-fund

While revenue missed estimates this quarter, and both margins and cash flows remained pressured, Aehr delivered where it mattered most – bookings and backlog. Q3 bookings rose 500% sequentially to $37.2 million, which Aehr says puts it on track to reach the upper end of its $60 to $80 million forecast for 2H. Aehr is continuing to see solid momentum in Q4 with $12.2 million in bookings to date, taking its effective backlog above $50 million and supporting the revenue inflection now becoming more visible in Q4.

Additionally, Aehr is continuing to expand capacity, tapping into contract manufacturers to support an additional 20 Sonoma systems per month. This comes on top of the capacity expansion we outlined last week in our analysis Aehr Sees 2H Bookings up 4X vs 1H, Supporting Strong FY27 where Aehr explained it could support 20 of both its wafer-level and package-level systems each month if needed. Importantly, Aehr noted this new capacity could be almost immediately available for shipments.

Aehr had broken out prior to earnings, and using technicals we entered the stock. The same will be true for when we exit the stock. This is not a stock we want to be early to enter or late to exit. Knox will cover more in his upcoming webinar.

Bookings up 500% QoQ, Book-to-Bill of 3.5X

As we had covered just last week prior to Q3’s report, Aehr unofficially guided for bookings to rise roughly 4X to $60 to $80 million in 2H FY26, with the company already off to a strong start to potentially exceeding that forecast.

Bookings rose 500% QoQ in fiscal Q3 to $37.2 million, a fresh quarterly record for the company, and driven by the flurry of orders we covered last week, including the $14 million order from its lead AI processor customer placed one day before quarter-end on February 26. Aehr also offered a look at its book-to-bill ratio, noting it exceeded 3.5X in the quarter, reflecting the strong demand it has been seeing recently across AI processors, ASICs and silicon photonics; while this is not typically a metric provided by the company, combined with the bookings and backlog strength, it reinforces the durability of demand and revenue acceleration in FY26.

Aehr also pointed out that in the first five weeks of fiscal Q4, it received an additional $12.2 million in bookings, with this related to its two orders announced in March, including the new major SiPho customer. Aehr also stated that on April 6, it received an order from a brand-new customer for Sonoma for reliability qualification of a new AI processor, though no other details were given. This brings Aehr’s effective backlog to $50.9 million (from Q3’s ending backlog of $38.7 million, up 113% YoY and 228% QoQ), a new record for the company and offering strong visibility into Q4 and early FY27 revenue.

To circle back to the chart we provided last week for bookings and revenue, there are a few new takeaways. Based on management’s commentary to be on the high end of the $60-80 million bookings forecast, or reasonably assumed at $75 million, Aehr’s Q4 bookings would be estimated at $37.8 million, up less than 2% QoQ. Given that Q3 had seen $12.2 million in bookings in five weeks, there will need to be some acceleration through the end of May, or a few larger orders coming in.

Additionally, we do also see the first sign of revenue inflecting in Q4, with Aehr’s maintenance of 2H revenue guidance of $25 to $30 million implying $17.2 million at midpoint. This still leaves a >$20 million difference between estimated bookings and revenue to flow through to backlog, setting the stage for a strong acceleration into the first half of FY27 as this backlog ships. Further supporting this was commentary we detailed last week on some of the recent orders shipping in FQ1/second half of CY2026, with the AI ASIC customer forecasting “substantial expansion of Sonoma systems purchases beginning in the second half of calendar 2026 and continuing into '27.”

Brief Customer Update

While there have been no major new updates since last week, aside from the limited details on the April 6 order noted above, there were a couple of comments from management around AI and SiC that differed a bit from last quarter’s call.

Aehr said it is actively engaged with multiple additional AI processor companies on benchmarking, and expects “meaningful progress” to be made, though with no clear timeline. Management also said that they have several companies ranging from AI accelerators, edge processors, and CPUs that are providing roadmaps on devices and asking about WLBI capabilities, suggesting there could be some new future engagements or potential orders down the road. Aehr also noted that the benchmark evaluation with a top-tier AI processor supplier is making good progress, but taking longer than expected.

On memory, Aehr said they are in discussions with key HBM suppliers, and “seeing the added potential for HBM insertions with our FOX multi-wafer test and burn-in system road map that extends to flash, high-bandwidth flash, DRAM and HBM memories,” with these opportunities expected to drive orders in FY27 that ramp in FY28.

For ASICs, CEO Gayn Erickson said he was “surprised” at how many “ASIC suppliers don't do production burn-in yet or are talking about doing it,” estimating it could be only 5% or 20% that actually get burnt-in. These comments imply that the ASICs opportunity could be increasingly large if burn-in adoption accelerates, as Aehr’s ASICs customer is one of the key anchors to its strong bookings and FY27 growth forecast.

On SiC, Aehr noted this quarter that they are seeing an uptick in activity and customer forecasts, particularly from Japanese and German OEMs for upcoming EV launches. Management said that while they are “not yet counting on significant revenue from this segment to return yet,” they believe SiC “could still be a very good performing segment for us next year.”

Aehr Taking Capacity Another Level Higher via Contract Manufacturing

Aehr’s comments on capacity were some of the most important from last quarter, notably that management highlighted they had the capabilities to ship 20 systems a month at either wafer or package-level and could extend that to 20 of each per month as needed. Commentary from Q3 implied that Aehr’s Fremont facility is capable of supporting that itself, with Aehr now moving to contract manufacturing for an additional leg higher in capacity.

This quarter, CEO Gayn Erickson explained that “in addition to our Fremont expansion, this quarter, we'll begin shipping Sonoma systems from one of our current contract manufacturers, adding capacity of more than 20 additional Sonoma systems per month. This meaningfully increases our ability to support future growth.” Erickson further clarified that Aehr the contract facility would support larger volume orders of Sonoma SKUs, while Fremont would still manufacture both Sonoma and FOX products.

Simply put, turning to these two contract manufacturers for additional production will move Sonoma’s monthly production curve up to 40 per month. One reason for this is that packaged-part engagemetns are implied to be easier to secure, and also can be as large or larger than wafer-level: “the ASP of a production order set in wafer-level burn-in can be $10 million to $20 million in an order, let's say, okay? Package-level can be that big or bigger, too, okay? So when they come in, it looks like, oh, right now, we see demand on both significant. Now the engagement and the work to get a wafer-level burn-in is definitely harder than package level.” This is key as Aehr could now secure and support more large-scale Sonoma deals with a faster shipping cadence, quickly supporting revenue upside.

While Aehr does not publicly disclose pricing, the $5.5 million order from last quarter for multiple systems implies a reasonable range could be around $1 million for a rough estimate of what this capacity could support; at that estimate, this would be around $40 million per month or $480 million annually. This also does not include the potential wafer-level revenue opportunity that we estimated last week to be as high as $960 million to $1.2 billion at full scale each month.

Most importantly, Aehr expects this uplift in Sonoma capacity to immediately be available, with the first products ready to ship to customers this quarter (aka May), with management wanting the contract manufacturers to be ready to ship in full volume by the summer when Sonoma is expected to ramp.

Quick TAM Note

It’s important to share some of Aehr’s brief discussions on its TAM and growth opportunities from more powerful chips, as it was again hinted that Aehr could potentially vault to hundreds of millions in revenue in the future.

As we have covered in detail in our power analysis, Why Power is Critical for Data Centers and their Hyperscaler Customers, GPU generations are getting increasingly more powerful with each cycle. Aehr says that this trend, including the upcoming chips on Nvidia’s roadmap, “break the current tools, and so there's a continuous road map” for Aehr’s solutions, such as Sonoma, which is continuously adapting to support higher power and higher current.

CEO Gayn Erickson also believes there is a natural progression for Aehr offering both wafer and package level, as this versatility “becomes particularly valuable when you have like a package that has multiple processors in it and all the HBM memory, right? So in those particular ones, I mean, the CoWoS substrate is more expensive than the silicon itself or the processor … So I think there's a progression over time where people will move towards wafer-level on the things they can default to package-level where they can't.”

Overall, Aehr believe that package-level burn in supports a multi-hundred million dollar TAM, while wafer-level is higher. Erickson specifically highlighted memory spend for fabs through 2031 and percentage allocated to test budgets, noting the burn-in allocation could be as high as “multiple billions of dollars per year in the next couple of years on an annual basis.” Given this trend and answering his own question about why Aehr is not at $500 million in revenue , Erickson hinted that Aehr has a “very good opportunity to significantly grow our package-level and wafer-level business across the biggest segments that are driving burn-in,” and why they are increasing capacity to this degree.

Financials

Revenue Growth to Accelerate from FQ4

Aehr’s FQ3 revenue ending February was down (43.7%) YoY and up 4.3% QoQ to $10.3 million, missing estimates by (4.9%). The decline was primarily driven by lower shipments of FOX systems and WaferPaks for wafer-level burn-in business, partially offset by stronger demand for the Sonoma systems and burn-in modules from the company’s hyperscaler customer. Systems revenue was down (46%) YoY and up 16% QoQ to $5.8 million. Contactors revenues, which include WaferPak contactors, were down (49%) YoY and (13%) QoQ to $3.0 million. Aehr added that its consumables/WaferPak business “will consistently be at 30% or more of our total revenue, and our margins will increase as sales of these value-add consumables grow.”

Management reiterated the 2H FY2026 revenue guidance of $25 million to $30 million given during FQ2 results and now expects to be on the high side of the range. The FQ4 revenue estimates have been revised higher by 7.3% since the announcement of results. Analysts expect FQ4 revenue to grow by 22.3% YoY and 67.1% QoQ to $17.2 million. Revenue growth is further expected to accelerate to 44.6% YoY in FQ1, then to 97.8% and 134.4% in the next two quarters.

Looking ahead, due to the strong AI-related demand, the company’s FY2027 revenue is expected to ramp significantly and accelerate to 71.7% YoY to $83.2 million from an expected decline of (17.9%) for FY2026 ending May. While there will be slight changes to these estimates as the management announced during the earnings call that they will change the fiscal year from the last Friday of May to the last Friday of June effective after the fiscal year ends on May 29, 2026.

The company’s new FY2027 will begin on June 27, 2026, and end on June 25, 2027. As a result, there will be one month of financial results from May 30, 2026, to June 26, 2026, which will be reported as a transition period when the company files the 10-Q report in the FQ1 ending September 2026.

Margins

The company’s margins are under pressure due to the lower revenue and unfavourable product mix.

FQ3 gross profits were $3.4 million or 32.7% of revenue compared to $7.3 million or 39.2% of revenue in the same period last year. The adjusted gross margin was 36.5% compared to 42.7% in the same period last year. The decline was due to lower revenue and a less favorable product mix as last year's quarter included a higher proportion of higher-margin WaferPak revenue.
FQ3 adjusted operating loss was ($2.5 million) or (24.7%) of revenue compared to an adjusted operating income of $1.5 million or 8.2% of revenue in the same period last year. The decrease in margins was primarily due to lower revenue.
FQ3 adjusted net loss was ($1.5 million) or (14.8%) of revenue compared to an adjusted net income of $1.98 million or 10.8% of revenue in the same period last year. Management expects to return to profitability on a non-GAAP basis in FQ4.

Adjusted EPS beat of 28.6%

The company’s FQ3 adjusted EPS came at ($0.05) compared to $0.07 in the same period last year and beat estimates by 28.6%. Analysts expect adjusted EPS to be ($0.04) for FQ4, though Aehr expects to return to profitability on an adjusted basis in the quarter.

Looking forward, analysts expect adjusted EPS to be ($0.11) for the FY2026 ending May and improve significantly to $0.13 in FY2027 and $0.26 in FY2028.

Cash Flow and Balance Sheet

The company’s cash flows have been weak due to current losses. However, it should improve in the coming quarters as the revenue is expected to ramp significantly in FY2027.

FQ3 operating cash outflow was ($3.7 million) or (35.8%) of revenue compared to ($1.6 million) or (8.8%) of revenue in the same period last year.
FQ3 free cash outflow was ($3.8 million) or (36.5%) of revenue compared to ($3.3 million) or (17.8%) of revenue in the same period last year.
The company had cash of $36.9 million and no debt at the end of the quarter. During FQ3 the company raised $10.5 million in gross proceeds through the sale of 269,000 shares. Since the end of FQ3, they raised another $19.5 million gross proceeds through the sale of 477,000 shares and thereby increasing the cash to $56.4 million.
On April 8, the company entered into an equity distribution agreement with William Blair and Craig-Hallum Capital Group, in connection with the offer and sale of up to $60 million of the company’s stock through an at-the-market offering program.
Inventories were down (3.7%) QoQ to $41.2 million.

Conclusion

Q3’s fundamentals did not improve, yet the signs and signals are flashing for Q4 to be the long-awaited turnaround for Aehr with revenue expected to accelerate sharply to 22.3% YoY and non-GAAP profitability to return.

Bookings surged 500% QoQ to $37.2 million, with Aehr reporting a book-to-bill ratio of 3.5X in the quarter, underscoring the strength of demand. Q4’s bookings to date of $12.2 million take Aehr’s effective backlog to $50.9 million, and combined with the >$20 million gap between implied bookings and revenue in Q4, Aehr is offering strong visibility into the upcoming revenue acceleration into the first part of fiscal 2027. Capacity expansion further supports this with additional capacity of 20 Sonoma systems per month coming online almost immediately.

As stated, we will use technicals to guide or entries or exits with this stock reserved for the Advanced tier, which requires strong risk management discipline.

Damien Robbins, Equity Analyst at I/O Fund contributed to this analysis.

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Silicon Motion: Strong Consumer SSD Demand, Trying to Move into AI Enterprise Markets for 2027-2028

Posted on April 10, 2026June 30, 2026 by io-fund

That said, management has made it clear execution is dependent in part on securing NAND supply on a stable basis, with higher input costs passed through to customers.

Brief Product Overview

Moving into Data Center with MonTitan and Enterprise SSDs for AI Servers

Ramping for Vera Rubin’s BlueField DPU in 2H 2026

Headwind #1: Timing

A key factor behind the soft forward QoQ growth is likely the PC/mobile headwinds given the significance of eMMC/UFS controller and client SSDs in terms of dollar growth and revenue contribution.

Headwind #2: NAND Procurement

Financials 

Revenue Growth Accelerates to 45.7% in Q4 2025 