A comprehensive Bill of Materials (BOM) analysis by Morgan Stanley on NVIDIA's next-generation Rubin rack reveals a significant revaluation of component values that surpasses market expectations.
The report indicates that the price of a Rubin rack procured from ODMs is approximately $7.8 million, nearly doubling from the roughly $3.99 million for the previous-generation GB300 rack. This substantial increase in value is not solely driven by the core GPU.
Among the downstream components covered, the content value increase for PCB is the most pronounced, surging 233% compared to GB300. This is followed by MLCCs (+182%), ABF substrates (+82%), power supplies (+32%), and liquid cooling components (+12%).
Concurrently, the report notes that the ODM value-add portion is expected to rise 35% to 40%, contrary to market expectations. This counters the prevailing market view that the standardization of the Rubin system would compress ODM value-add. The overall valuation of the ODM sector remains attractive, with a current CY27 forward P/E of approximately 13x, slightly above the 20-year average of about 11.5x, but the gap is not substantial.
The total rack price is close to $7.8 million, with memory's share jumping to 26%.
Morgan Stanley's bottom-up BOM analysis shows that a hyperscaler procuring a Rubin VR200 NVL72 rack from an ODM costs about $7.8 million; purchasing through OEM channels like Lenovo, Asustek, Giga-Byte, or Dell would be more expensive.
A key factor driving the significant increase in rack cost is the notable rise in memory prices. The report states that memory prices have increased substantially since NVIDIA launched the GB200 NVL72. Under the old memory price structure, memory accounted for only 5% to 10% of the GB200 NVL72 rack BOM. For the VR200, increased memory content coupled with significant price hikes has elevated memory's share to approximately 25% to 30%, with an estimated absolute value of about $2 million, a roughly 435% increase from GB300's approximately $370,000.
This change directly reduces the GPU's share of the BOM—from about 65% in GB200 to about 51% in VR200. The GPU's absolute value increased from about $2.52 million to approximately $3.96 million, a rise of about 57%.
Furthermore, the report highlights an alternative scenario: if a hyperscaler opts to self-procure SOCAMM memory modules, the rack ASP would drop from about $7.8 million to around $6.7 million.
PCB: The downstream component with the largest increase, driven by new modules.
Among the downstream components covered by Morgan Stanley, PCB shows the most significant content value increase, rising about 233% from GB300's approximately $35,100 to about $116,700.
This surge is driven by multiple factors.
First is the introduction of new modules: The Rubin system adds ConnectX module PCBs (72 per rack, $270 each) and Midplane PCBs (18 per rack, $1,500 each). These PCBs were not present in GB300, and together they contribute approximately $46,400 in new content value.
Second is the comprehensive upgrade of existing PCB specifications: The compute board is upgraded from a 22-layer HDI PCB in GB300 to 26 layers, with the CCL grade improving from M7 to M8. The switch tray PCB is upgraded from 24 layers to 32 layers. The compute tray also adds a new 44-layer midplane PCB. Additionally, the physical size of the compute board has increased slightly.
MLCC and ABF Substrate: New modules drive demand beyond expectations.
For MLCCs, Morgan Stanley estimates the VR200's per-rack MLCC content value at about $4,320, an increase of approximately 182% from GB300's roughly $1,530.
The increment comes from two main dimensions:
First, a significant increase in MLCC usage per board on the compute board and switch board (compute board rising from $25 to $90, switch board from $20 to $45).
Second, additional demand from newly introduced BlueField DPU modules (18) and ConnectX Orchid modules (72).
The report notes that demand for MLCCs in high-end AI servers is already strong, with various ODMs actively building inventory in preparation for the production ramp-up of Rubin racks starting in the second half of 2026.
For ABF substrates, the VR200's content value increased about 82% from GB300, rising from approximately $11,200 to about $20,300.
Driving factors include:
The unit price of the ABF substrate for the Rubin GPU increased from about $100 to about $200 (a 100% increase).
The number of NVSwitch ASICs increased from 18 per rack to 36.
The number of ConnectX chips increased from 36 to 72.
Morgan Stanley cites analyst Shoji Sato's estimate that the unit price of the Rubin GPU ABF substrate is approximately $200.
Power Supply and Liquid Cooling: Increased power density drives steady growth.
For power supplies, the VR200's per-rack power supply content value is about $76,000, a 32% increase from GB300.
Morgan Stanley's supply chain survey indicates that besides the standard 110kW power shelf for the Vera Rubin platform, at least one U.S. cloud service provider is adopting an HVDC independent power rack within the Vera Rubin platform.
The report anticipates that the 800V DC architecture will see large-scale adoption in NVIDIA's Rubin Ultra platform (planned for launch in the second half of 2027). Delta is currently collaborating with at least three U.S. cloud service provider customers to advance the deployment of HVDC platforms in ASIC power rack projects, with initial launches expected to start in the second half of 2026.
For liquid cooling, the Vera Rubin server rack will adopt a fully liquid-cooled design (fanless). The total thermal management content value per rack (excluding the side-mounted CDU) is approximately $72,100, a 12% increase from GB300's about $64,600.
The increase is mainly due to higher usage of tray manifolds and quick disconnects (QD), along with optimized cold plate design for bottom assembly components. Including the side-mounted CDU, the total thermal management content value is about $122,100.
ODM value-add rises contrary to expectations; absolute profit is the key metric.
Morgan Stanley's analysis directly challenges the mainstream market view.
The report points out that the market widely expected the "standardization" of the Rubin compute tray to lead to a decline in ODM value-add. However, bottom-up calculations show that ODM value-add will increase by about 35% to 40%, rising from GB300's approximately $108,200 to VR200's about $149,600.
The sources of this increment are distributed across the entire rack: compute board assembly/testing (increasing from about $12,100 to $16,200), compute tray assembly/testing (from about $28,800 to $32,400), overall rack assembly/testing (from about $22,400 to $28,800), and the newly added ConnectX/Orchid module assembly/testing (adding about $3,600), among others.
This increase in value-add aligns with statements made by Wistron's management during the Q4 earnings call—they explicitly indicated that the ODM dollar value-add for Rubin would improve.
At the gross margin level, due to the significant rise in overall rack ASP, ODM gross margin is expected to decline from about 2.7% for GB300 to approximately 1.9% for VR200.
However, the report emphasizes that investors should focus on the growth in absolute dollar profit, not the decline in gross margin. If a hyperscaler self-procures SOCAMM, reducing the rack ASP to about $6.7 million, the ODM gross margin would recover to around 2.2%.
Shifts in manufacturing models and ODM investment prioritization.
The report also highlights a noteworthy structural trend to monitor: an increasing number of ODMs are discussing a consignment business model.
Hon Hai first mentioned this model during its Q4 2025 earnings call. Quanta subsequently stated during its Q1 2026 earnings call that it expects some projects to transition to a consignment model in the second half of 2026.
Morgan Stanley views this shift as potentially helping to alleviate ODM working capital pressure, a positive signal in the long term. However, it remains unclear what proportion of projects will ultimately complete this transition.
From a valuation perspective, the ODM sector's overall CY27 forward P/E is approximately 13x, still at a premium compared to the roughly 20-year average of 11.5x. Nevertheless, the report considers the risk-reward ratio to remain attractive.
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