Hon Hai Precision Industry Co. Ltd. (HNHPF), a partner of NVIDIA (NVDA), reported better-than-expected quarterly revenue, signaling that global AI infrastructure spending remains at a high level.
For the three months ended September, Hon Hai's revenue totaled NT$3.03 trillion (approximately US$95.4 billion), up 47% year over year. The analyst average estimate was NT$2.83 trillion.
Hon Hai's strong revenue growth followed optimistic guidance from Micron Technology (MU) last week, further evidence that AI spending continues to climb. This momentum has not weakened even as executives such as OpenAI's Sam Altman and Anthropic's Dario Amodei call for slowing AI development to ensure it remains under human control.
Data shows Micron's fourth-quarter revenue was US$54.23 billion, up 379% year over year and 31% quarter over quarter, marking a record for six consecutive quarters; adjusted earnings per share were US$33.42, up more than tenfold year over year; guidance for the next fiscal quarter also far exceeded expectations: the midpoint of revenue guidance was US$61.5 billion, above Wall Street's estimate of US$57.57 billion; the midpoint of adjusted earnings per share guidance was US$38.15, above Wall Street's estimate of US$35.81.
Hon Hai is NVIDIA's server assembly partner and has benefited over the past two years from the global cloud infrastructure buildout. As investors grow increasingly concerned about overcapacity, rising debt levels, and regulatory setbacks, the company's sales are seen as a bellwether for the AI industry's development. Its stock price has risen about 10% since the start of the year.
Foxconn parent Hon Hai still derives a considerable portion of its revenue from the low-margin business of contract manufacturing for Apple. Hon Hai is the main assembler of the iPhone, with factories in both China and India. Analysts Steven Tseng and Rebecca Wang said: "In the coming years, driven by AI infrastructure demand, Hon Hai is expected to maintain 25%-35% revenue and profit growth. With deep vertical integration and a global footprint, Hon Hai has significant advantages as servers become increasingly complex and demand for localized production continues to grow. The cloud computing business has surpassed the smart consumer electronics business to become the company's largest segment. As capital spending expands from hyperscale cloud providers to neoclouds, sovereign AI, and enterprise buyers, Hon Hai's sales are expected to climb further."
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