TD Synnex's (SNX) artificial intelligence infrastructure division Hyve is an "underappreciated asset" with potential upside catalysts, RBC Capital Markets said in a note emailed Wednesday.

Hyve's revenue acceleration is backed by new programs with the five major US hyperscalers, each representing a more than $1 billion opportunity, as well as expanding programs with existing clients, and rising investments in AI infrastructure, the note said.

RBC said it expects Hyve to represent a 40% margin contribution by fiscal 2027, up from 27% in Q1 of 2026, a figure which may be "potentially conservative" due to Hyve's "diversified customer base, expanding programs, traditional compute focus, and new leadership."

Additionally, TD Synnex's supply chain capabilities give Hyve a competitive advantage against rivals in periods of shortage and price volatility for components, the note said.

The investment firm said Hyve's "high-growth, high-margin business is a key earnings driver" for TD Synnex.

RBC lifted TD Synnex's price target to $315 from $250 and maintained its outperform rating on the company.

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