Foxconn Surprises Analysts with 19% Increase in Revenue from AI Business

Hon Hai Precision Industry Co., commonly known as Foxconn, reported better-than-expected sales for the June quarter thanks to its expanding AI server business. The company’s revenue for June was NT$490.7 billion ($15.1 billion), bringing the total for the quarter to NT$1.55 trillion, a 19% increase compared to the same period last year. Initially, analysts predicted a 13.8% rise in revenue, but expectations grew after Hon Hai announced earlier that its AI business would help it surpass estimates for the quarter.

Hon Hai’s Taipei-traded shares have experienced significant growth this year, more than doubling in value. The company’s stock reached new highs in June as investors are optimistic about its ability to capitalize on the AI market expansion. After facing challenges in 2023 due to declining demand for consumer electronics, Hon Hai has been able to offset this with revenue from orders for AI servers and other data center equipment, diversifying away from smartphone manufacturing.

In a statement released along with its monthly sales report on Friday, Hon Hai expressed optimism about the third quarter generating growth compared to the second quarter and the same period last year. The company’s success in the AI hardware market has helped its shares surpass the NT$200 level that its founder, Terry Gou, pledged to achieve in 2016. The AI boom has also brought attention to Taiwan, with the latest Computex event attracting CEOs from major US chipmakers looking to partner with key suppliers and data center equipment manufacturers.

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