On November 24, Foxconn Industrial Internet Co., Ltd. (601138.SH), a leading AI computing power stock in the A-share market, saw its shares plunge in the afternoon session, briefly hitting the daily limit-down before closing 7.80% lower at CNY 55.94 per share—a two-month low. As a core AI computing power player once valued at over CNY 1.3 trillion, the company lost nearly CNY 100 billion in market cap in a single day, with cumulative losses exceeding 14% over the past three trading sessions.
The same day, investors questioned the company on an interactive platform about rumors of a downward revision to its Q4 performance targets and potential adjustments to the L10/L11 business model by major clients, which could negatively impact its operations and profitability. Foxconn Industrial Internet responded that its Q4 operations, including shipments of GB200 and GB300 products, are proceeding as planned, with strong client demand and normal production and deliveries. It denied any undisclosed profit target cuts and confirmed ongoing collaboration with clients on next-gen products.
Parent company Hon Hai Precision (2317.TW) also issued a clarification, emphasizing normal operations. By November 25, Foxconn Industrial Internet rebounded 1.2% to CNY 56.61 per share.
Despite robust fundamentals, the stock has trended downward since hitting a peak on October 30, shedding over 30% by November 24 and losing more than CNY 450 billion in market cap, sliding from a high above CNY 1.5 trillion to CNY 1.11 trillion.
Financially, the company posted strong results: Q1-Q3 2025 revenue rose 38.4% YoY to CNY 603.9 billion, with net profit up 48.52% to CNY 22.49 billion. Q3 revenue reached CNY 243.2 billion, with profit growth exceeding 60%.
However, market sentiment diverged from bullish sell-side forecasts. Post-Q3 earnings, analysts maintained optimistic views, citing strong AI server demand and imminent GB200 mass production. Guosen Securities raised profit forecasts for 2025–2027 to CNY 35.6 billion, CNY 69.3 billion, and CNY 87.5 billion, respectively, citing GPU AI server revenue growth of over 5x YoY and 27x quarterly growth in 800G switches. Huatai Securities projected 2025–2027 EPS of CNY 1.82, CNY 3.36, and CNY 4.30, maintaining a "Buy" rating despite negative operating cash flow due to inventory buildup for AI servers.
Notably, institutional target prices (around CNY 75+ in early November, implying ~40x 2025 P/E) now sharply contrast with the current CNY 55.94 (28x P/E), reflecting heightened market pessimism.
Concerns have shifted from earnings to business model risks. Rumors of major clients adjusting L10/L11 models—where L11 involves higher-value system integration—raised fears of Foxconn Industrial Internet reverting to lower-margin assembly roles, potentially triggering valuation reassessments. As a key Nvidia supplier (28% of 2024 HGX/DGX server shipments per Morgan Stanley), its fortunes are tied to AI chip demand.
External factors also weighed on the stock. Nvidia’s post-earnings drop and doubts about AI monetization amid soaring cloud capex (e.g., Microsoft, Google) fueled "AI bubble" fears, indirectly pressuring Foxconn Industrial Internet.
In response, the company reaffirmed its core supplier role for Nvidia’s next-gen products (e.g., GB300) and highlighted upgrades for the Vera Rubin platform in power efficiency and cooling. It also plans to adjust its buyback price ceiling (currently capped at CNY 19.36 post-dividend) to expedite repurchases. Separately, Hon Hai disclosed the sale of idle assets in Wuhan (CNY 78.97 million gain), signaling improved asset utilization.
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