Netweb shares surge 10% as AI systems drive 180% profit jump

Netweb Technologies shares jumped nearly 10% on Friday, bucking a sluggish broader market, as investors bought into the Indian server maker’s artificial intelligence-driven earnings surge. The stock hit an intraday high of ₹4,597.95 on the BSE, sharply outperforming the Sensex, which was up just 0.20% at 78,087.

The rally followed the company’s July 28 report for the first quarter of fiscal 2027. Profit after tax soared 180% year-on-year to ₹85.32 crore, while revenue from operations surged 172% to ₹819.69 crore. Operating EBITDA rose 169% to ₹120.52 crore, with margins expanding sequentially to 14.70%.

Income from AI systems skyrocketed 484.2% year-on-year to become 62.29% of total operating revenue. Sonam Srivastava, founder of Wright Research, noted the company is successfully monetizing this demand. "Profit is outpacing revenue, the PAT margin has crossed 10%, and the operating EBITDA margin has bounced back to 14.7% from 12.5% last quarter. So, they're clearly turning this AI-led demand wave into real, profitable growth, not just chasing topline through discounts or aggressive pricing," Srivastava said.

Srivastava highlighted that Netweb is positioned at the centre of India’s push for sovereign compute and local server manufacturing. "Their tie-up with Nvidia is a huge advantage, since it gives them access to some of the most supply-constrained hardware out there. AI systems, which used to be just a small part of the business, have now become the main revenue driver," she added.

The company's order book stood at ₹2,506.94 crore at the end of the June quarter. This forward pipeline has helped the stock deliver multibagger returns of over 120% in the past year. Year-to-date, the shares are up more than 45%.

Despite the fundamental strength, technical analysts remain divided on the stock's immediate trajectory. Vipin Kumar, AVP-Research at Globe Capital Market, argued the stock is breaking out of a month-long consolidation. "Given this favourable chart structure and robust relative strength, we expect the stock to momentum-drive toward its all-time highs in the near term," Kumar said.

Conversely, Aditya Thukral, Founder and Analyst of AT Research and Risk Managers, warned that the stock has broken its short- to medium-term trendline. "It has entered the corrective phase and is not an ideal situation for investors to hold onto their long positions; they should look for an exit opportunity near the short-term resistance of ₹4,800," Thukral said. He advised waiting for a potential drop toward the ₹3,500 support level before re-entering.