Hon Hai's Shares Surge on AI Revenue Surge, Beating Expectations

Hon Hai Precision Industry Co., Ltd. (TWSE:2317), also known as Foxconn, has seen its shares rise significantly in premarket trading on Monday, following the company's announcement of record fourth-quarter revenue driven by strong demand for artificial intelligence (AI) technologies. Foxconn, the world's largest contract electronics manufacturer, reported a 15% year-over-year increase in revenue to NT$2.132 trillion ($65.09 billion) for the fourth quarter, with AI server demand being a significant contributor to this growth.

Foxconn's revenue growth in the AI server segment was particularly impressive, with a surge of over 60% in the second quarter of 2024 compared to the previous quarter. This strong demand for AI servers is expected to continue, with AI servers projected to contribute 40% of overall server revenue in 2025. Foxconn's vertical integration advantages in the AI server industry, which enable it to provide every key component for AI servers, have been a significant factor in its market leadership and growth potential.

Foxconn's strong performance in the AI server market has had a positive impact on its share price, with shares of the company rising by 2% in premarket trading on Monday. This surge in share price comes as Foxconn's CEO, Terry Gou, is set to give a keynote address at the CES trade show in Las Vegas, where he is expected to discuss the company's latest innovations and growth prospects in the AI market.



Hon Hai's AI revenue growth trajectory has been robust, with AI server revenue surging over 60% in the second quarter of 2024 compared to the previous quarter. This growth is driven by strong customer demand and the company's vertical integration advantages in the AI server industry. Hon Hai is the only supplier that can provide every key component for AI servers, from modules and baseboards to complete racks and data centers. This comprehensive supply chain vertical integration capability has enabled Hon Hai to become a leading player in the AI server market.

In comparison, Nvidia, a major player in the AI chip market, has also seen significant growth in its AI-related revenue. In the fourth quarter of 2024, Nvidia's revenue grew by 2% premarket, driven by strong demand for AI technologies. Nvidia's CEO, Jensen Huang, is expected to give a keynote address at the CES trade show in Las Vegas, which could provide further insights into the company's AI-related growth prospects.

AMD, another major player in the AI chip market, has also seen strong growth in its AI-related revenue. In the fourth quarter of 2024, AMD's shares rose by 3% premarket, reflecting the company's strong performance in the AI market. AMD's AI-related revenue growth is driven by its high-performance computing and adaptive computing segments, which include AI-specific products and technologies.

In summary, Hon Hai's AI revenue growth trajectory has been robust, with AI server revenue surging over 60% in the second quarter of 2024. This growth is driven by strong customer demand and the company's vertical integration advantages in the AI server industry. In comparison, Nvidia and AMD have also seen significant growth in their AI-related revenue, driven by strong demand for AI technologies and the company's AI-specific products and technologies. Hon Hai's strong performance in the AI server market has had a positive impact on its share price, with shares of the company rising by 2% in premarket trading on Monday.