Shares of global chipmakers rallied on Monday after Foxconn, also known as Hon Hai Precision Industry (HNHPF), exceeded expectations to post its highest ever quarterly revenues for the Fiscal fourth quarter. The Taiwanese electronics giant, which is Apple’s (AAPL) largest iPhone assembler, posted revenues of NTD$2.13 trillion ($64.7 billion) in the fourth quarter, up by 15.2% year-over-year, and ahead of consensus estimates of NTD$2.1 trillion.
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Chip Stocks Climb Following Foxconn’s Results
Following the better-than-expected revenues, shares of major chipmakers saw notable gains. Nvidia (NVDA) advanced around 3% whilst Taiwan Semiconductor (TSM) hit a record high. European chipmakers also joined the rally, with both Infineon (IFNNY) and ASML (ASML), climbing around 6% each.
AI Drives Growth at Foxconn
Foxconn’s cloud and networking products division saw strong sales on increased AI server demand. Notably, Nvidia, a key customer, contributed to this surge. The company’s computing and automotive businesses also showed impressive year-on-year gains. However, its smart consumer electronics segment, including iPhones, was “roughly flattish”, the company said in a statement.
Foxconn acknowledged the “traditional off-season” in the first quarter, adding that “even with record high revenue in the fourth quarter of 2024, the sequential performance of the first quarter will reach roughly similar levels that are average to the past five years.” However, management remain confident that Q1 will show “significant growth” from one year ago.
Wedbush Analyst Expects Continued AI Momentum
AI, the dominant driver of 2024’s stock market gains, is set to sustain its momentum. Wedbush analyst Dan Ives said in a report dated December 30 that stretched stock valuations and Donald Trump’s tariff proposals could lead to market volatility and create buying opportunities in the tech sector. He added “tech stocks will be robust in 2025 on the shoulders of the AI Revolution” and more than $2 trillion in incremental AI capital spending over the next three years.
What Are the Best Chip Stocks to Buy Right Now?
For investors interested in investing in the semiconductor industry, we have rounded up the best chip stocks that analysts are cautiously optimistic or bullish about using the TipRanks Stock Comparison tool.
