This article first appeared on GuruFocus.
Hon Hai Precision Industry (HNHPF) is getting a fresh lift from the AI server boom. Revenue rose 34% in the April-to-May period to NT$1.69 trillion, or $53.6 billion, based on Bloomberg’s calculations from monthly sales data. The surge points back to one core driver: demand for Nvidia (NASDAQ:NVDA) servers that sit at the center of the AI infrastructure buildout. On a monthly basis, Hon Hai’s revenue jumped 40% in May, while analysts are projecting, on average, a 32% increase for the June quarter.
This is no longer just an iPhone assembler story. Hon Hai still generates a meaningful share of sales from building Apple (NASDAQ:AAPL) iPhones and MacBooks, but the center of gravity has shifted. Over the past year, its server business has surpassed smartphones as the company’s largest sales contributor. That could be one of the more important signals for investors watching the AI supply chain: the money is moving beyond chips and into the companies assembling the hardware that houses Nvidia accelerators.
Hon Hai has said it expects business to expand substantially in 2026, and the latest revenue numbers suggest AI infrastructure demand could remain a major tailwind. Alphabet (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), and Microsoft (NASDAQ:MSFT) are earmarking $725 billion in AI spending this year, even as investors continue to debate overcapacity risk and how the technology will be monetized. For Hon Hai, the key question now is whether the AI server cycle can keep feeding growth beyond the June quarter.
