Revenue matters, but the valuation is driven by the amount of profit. Margin in the server business must be very low (5%) and hence the valuation is a multiple of profit and not revenue.
I should have qualified that number right from the beginning as a back-of-the envelope estimation:
If we assume a 10x multiple to profit and a 5bn revenue, it results in 5.4% margin.
If we just say it was a 8x multiple, then it is 6.75%
It goes to 7.7% margin if we make the multiple to be 7x
