Netweb Technologies shares more than double in 3 months. Should you buy, sell or hold? – News Air Insight

Netweb Technologies has turned into one of the hottest small-cap stories on Dalal Street, with shares soaring more than 130% in just three months as investors bet on its expanding footprint in India’s booming artificial intelligence (AI) and cloud infrastructure markets. The rally, underpinned by hefty order wins and rising profitability, has pushed the stock to record highs, and raised the question of whether the momentum still has room to run.

Order wins and AI tailwinds

Fueling the rally are a string of robust order wins and strong visibility in the company’s AI and cloud infrastructure business. On September 21, Netweb bagged a Rs 450 crore contract to deploy AI infrastructure using its Tyrone GPU-accelerated systems, to be executed by FY25–26. Earlier this month, the company secured a Rs 1,734 crore order to supply Nvidia-powered servers under the IndiaAI Mission.

Without naming clients, the company said these projects will support the setup of AI infrastructure facilities, with the latest expected to be completed in the first half of FY27. Management expects the orders to boost revenue and profitability in the current and coming fiscal years.

Analysts say India’s structural shift toward digital infrastructure is a key growth engine, driven by rising internet traffic, AI adoption, and data-localisation policies. Ventura Securities projects India’s AI infrastructure market to reach Rs 8,700 crore by FY28 at a 29.5% CAGR, while the private cloud and hyperconverged infrastructure segments could touch Rs 14,100 crore at a 28.5% CAGR.

For Netweb specifically, revenue is expected to grow at a 36.7% CAGR to Rs 2,938 crore by FY28, led by AI systems and enterprise workstations logging a 50.9% CAGR to Rs 588 crore.

The stock climbed another 17.5% last week, hitting a new 52-week high of Rs 4,426.90 on October 6, extending its 46% rise so far in 2025.

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Expansion and profitability lift sentiment

Netweb has been expanding its manufacturing and AI capabilities to capitalise on the AI boom. The company launched a new SMT facility in May 2024 and is developing AI GPU systems in collaboration with Nvidia and Skylus.ai as part of its ‘Make in India’ server initiative.

As of June 30, 2025, the company’s order book stood at Rs 4,142 crore, backed by AI-driven demand. Profit after tax in Q1 FY26 doubled year-on-year to Rs 30.5 crore, while the AI segment’s share of revenue jumped to 29% from 7% two years ago. Analysts expect this segment to grow at a 40% CAGR, sustaining the company’s strong topline visibility and profitability momentum.

Should you buy, sell or hold?

Technically, the stock is in a decisively bullish zone, trading above all eight of its key simple moving averages from 5-day to 200-day. Its Relative Strength Index (RSI) stands at 81.8, indicating overbought conditions, while the MACD remains elevated at 399.4, reinforcing upward momentum.

“Netweb has rallied sharply after breaking out from a consolidation zone around Rs 1,400–Rs 2,100, supported by rising volumes and consistent higher highs and higher lows,” said Ajit Mishra, SVP, Research at Religare Broking.

“The price is well above all key moving averages (20, 50, and 200 DMA), indicating strong bullish control. However, the steep slope of the 20-DMA and extended RSI near overbought territory suggest the possibility of a short-term pause or mild retracement after a vertical rally,” said Mishra.

Mishra added that “immediate support lies near Rs 3,700–Rs 3,900, while the next potential resistance is uncharted as the stock trades at an all-time high,” maintaining that the trend remains “decisively positive, with ‘buy-on-dips’ favored until a clear reversal pattern emerges.”

Echoing that view, Drumil Vithlani, Technical Research Analyst at Bonanza, said, “Given the sharp rally, a brief consolidation or pullback toward Rs 3,800–Rs 3,900 cannot be ruled out. However, as long as the stock sustains above Rs 3,800, the trend remains firmly positive.”

Vithlani pegs the near-term target at Rs 4,800–Rs 5,000, with a positional stop-loss at Rs 3,800 on a closing basis.

With AI-driven orders, expanding capacity, and strong technical momentum, Netweb Technologies remains one of the most-watched small-cap tech stories this year. While analysts flag the potential for short-term cooling after a steep rally, the broader tone remains bullish, suggesting that investors may do well to watch for dips rather than exits.

Also read | Netweb Technologies shares soar 19% in a week. 5 factors driving the rally

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)