TD Synnex (SNX) is benefiting from accelerating AI-driven demand across its distribution business and Hyve unit, which is reshaping the company's mix toward structurally higher-margin growth, RBC Capital Markets said Thursday in a report.

RBC highlighted strong hyperscale infrastructure spending, enterprise data-center modernization and rising demand for AI-capable devices as key drivers.

Hyve continues to capture market share from hyperscalers, supported by its integrated design and full-lifecycle supply-chain model, seen as an advantage over pure-play competitors, the report said. New Hyve programs are scheduled to ramp up in late Q4 and early fiscal year 27, backed by more than 1 million square feet of new US manufacturing capacity and multiyear customer commitments, RBC said.

Higher component costs and supply constraints remain potential near-term headwinds, though TD Synnex's global scale and vendor relationships position the company well to manage them, the report said. RBC expects continued strength through fiscal 2026, with double-digit distribution growth and outsized gains at Hyve driving a more profitable business mix.

RBC forecasts fiscal 2026 revenue of about $75 billion and adjusted operating income of about $2.4 billion, with EPS of $19.02, reflecting the growing contribution from Hyve. On Thursday, fiscal Q2 results came in ahead of expectations, supported by strong AI-related demand, the report said.

RBC raised its price target on TD Synnex stock to $340 from $315 and maintained its outperform rating.

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