(Bloomberg) — Hon Hai Precision Industry Co. reported a 54.2% increase in monthly sales, signaling sustained demand in global AI infrastructure buildout by customers such as Nvidia Corp.
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Revenue for July climbed to NT$946.5 billion ($29.3 billion), Hon Hai said Wednesday in a statement. Analysts on average are looking for a 31.2% increase in sales for the three-month period ending in September.
The Nvidia server assembly partner has said that shipments of AI racks are expected to maintain their momentum in the current quarter, while demand for information and communications technology products is entering peak season. Hon Hai, also known as Foxconn, booked a bigger-than-expected 40% jump in its revenue in the April-June period and has established itself as a key AI hardware player by assembling servers that house Nvidia accelerators.
What Bloomberg Intelligence Says
Hon Hai’s 2Q sales likely reached a record NT$2.5 trillion, rising 40% based on its monthly disclosures, supported by robust demand for both AI infrastructure and consumer electronics. Cloud and networking growth seem to have led as hyperscale customers continue to expand AI-server deployment. Smart consumer electronics should have a solid quarter, supported by resilient iPhone demand, partly reflecting front-loaded purchases ahead of expected price increases for the next iPhone cycle as well as Apple’s procurement edge in securing memory supply. Though AI servers’ growing contribution is poised to continue weighing on gross margin, strong operating leverage and the shift to a consignment model for certain projects — which excludes high-value components from revenue — should help mitigate margin pressure.
-Steven Tseng and Sean Chen, analysts
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Alphabet Inc., Meta Platforms Inc., Microsoft Corp. and Amazon.com Inc. — the four largest players in the data center race — have committed nearly $2.4 trillion in spending over the coming years, pointing to massive ongoing investment in AI infrastructure, even as warnings abound about overcapacity and questions about how to monetize the technology persist.
Tech’s big debate this year has been whether the hundreds of billions being spent on server farms for artificial intelligence work will pay off. Amid persisting concerns, global investors dumped tech stocks in July. Hon Hai shares have shed about 16% from a peak in early June, though they’re still up about 12% since the beginning of this year.
https://finance.yahoo.com/technology/ai/articles/nvidia-partner-hon-hai-sales-073743931.html
