Nvidia Partner Hon Hai’s Sales Climb 52% With AI Server Momentum

Hon Hai Precision Industry Co. reported a 52% rise in monthly sales, lifted by demand for servers in a global race to build data centers and AI computational capacity.

Revenue in August came to NT$921.8 billion ($29.1 billion), Hon Hai said in a statement Saturday. That maintained the scorching pace of growth established in July, at 54% year on year, and keeps Hon Hai well ahead of expectations. Analysts on average are looking for about a 37% increase in sales for the three months ending September.

Hon Hai, which is Nvidia Corp.’s server assembly partner, has been buoyed by investments in cloud infrastructure around the world in recent quarters. The Taiwanese company’s monthly sales are seen as a check-in for the AI sector as concerns grow about overcapacity, rising debt levels and fierce competition.

Hon Hai, also known as Foxconn, remains tied to more modest margins from its business with Apple Inc. in the smartphone market. The company is the primary iPhone manufacturer with assembly facilities in China and India, although Apple is diversifying suppliers with the likes of Luxshare Precision Industry Co.

What Bloomberg Intelligence SaysHon Hai’s sales growth has accelerated with AI server shipments, but still lags more AI-focused peers because its sizable consumer electronics business dilutes cloud momentum. Gross margin and forward P/E also remain below the peer average, reflecting the lower-margin iPhone assembly business despite improving profitability through 2027.Click here for the research.-Steven Tseng and Rebecca Wang, analysts