Foxconn, the main supplier of Nvidia (NVDA) AI servers and maker of Apple (AAPL) iPhones, is still benefitting from the artificial intelligence spending boom as it signals a stronger start to the year than expected.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
The company, known officially as Hon Hai Precision Industry (HNHPF), reported revenue of NT$538.7 billion ($16.43 billion) last month, with sales up 3.16%. The company noted that the lunar new year holiday fell in January this year compared with February in 2024.
According to Bloomberg, Hon Hai said sequential growth in January was “better than the average level” of the last five years.
AI Demand Drives Sales for HNNPF
It comes after revenue for the company, which is Apple’s main iPhone assembler, jumped 15.2% in its Fiscal fourth quarter on robust AI server demand, with sales of consumer electronics flattish. Sales in December alone were up over 42% year-on-year. Then it predicted sequential first quarter sales would “reach roughly similar levels that are average to the past five years,” however today’s update suggests an improved performance.
Hon Hai, which is the world’s largest electronics manufacturer, is seen as a bellwether for the AI industry and has benefitted from massive investment by American technology companies. Recent updates from the likes Microsoft (MSFT), Meta (META), Alphabet (GOOGL) and Amazon (AMZN) shows Silicon Valley is doubling down on AI despite fears that China’s DeepSeek and others could be able to rival the U.S. without the same level of investment.
Meanwhile the company is in focus as Washington and Beijing trade blows over trade.
Hon Hai, which operates massive factories in China, has been seen pivoting away from the country, announcing last October that is building the largest factory making Nvidia’s most advanced artificial intelligence servers in Mexico.
In October 2023, it announced a partnership with NVDA to build a new class of data centers called “AI factories,” and has set a target of eventually capturing 40% of the overall AI server market.
What Is the Best AI Stock to Buy?
For investors interested in investing in AI, we have rounded up the best stocks that analysts are bullish about using the TipRanks Stocks Comparison tool.
