Nvidia Partner Hon Hai’s Growth Signals AI Market Expansion Impact
Taiwan-based Hon Hai Precision Industry Co, known as the biggest maker of Apple’s iPhone, has been witnessing a surge in stock price after the company revealed it expects better-than-expected quarterly sales. According to Yahoo Finance, Nvidia Corp’s partner Hon Hai saw a 15% revenue growth due to the sustained growth of AI in recent times.
The world’s largest maker of Apple’s iPhone, Hon Hai, reported a revenue of $64.6 billion for the past three months. Overall December 2024 revenue increased by 42% for the company, surpassing the analyst forecast. Hon Hai, also known as Foxconn, forecasted strong sales for the first quarter and its shares in Taipei rose 3.6%, the biggest intraday gain in the past two weeks.
Partnership with Nvidia
The performance of Hon Hai is highly dependent upon its partnership with Nvidia, a leader in the field of Artificial Intelligence. Nvidia’s key breakthroughs in AI technologies, especially GPUs and servers, offer Hon Hai a great opportunity to capitalize on this continuously emerging market. In 2024, Nvidia saw a boost in its market cap by $2 trillion, which showcased its growth as well as its lead in the AI industry.
Rising demand for AI technologies in healthcare, finance, and automotive industries has increased global demand for Nvidia’s AI solutions, driving Hon Hai’s revenues higher. Nvidia’s other suppliers like Ibiden are also planning for expansion amid the AI boom.
Due to these collaborations, Nvidia shares have also seen an upward movement. The ongoing AI revolution has positioned Nvidia as a market leader, with its advanced GPUs powering everything from AI servers to autonomous systems.
The analysts of Goldman Sachs also revised their 2024 earning forecast by 1% due to more than-expected December 2024 revenue. The analysts wrote. “ The sequential revenue growth in Cloud supports our positive view on the next generation rack-level AI servers shipment ramp-up, and general servers and networking equipment demand recovery.”
Diversifying Beyond iPhone Manufacturing
Commonly recognized for its role in the making of Apple’s iPhones, Hon Hai has implemented numerous methods to adapt to changing dynamics in the technology industry. One of the major developments that can be identified is the entry into the manufacturing of AI through association with Nvidia. Additionally, Hon Hai is expecting a growth in the revenue from its cloud services which includes manufacturing of AI servers.
However, an analyst from Citi Bank, Carry Liu has warned in a note that the stock could experience near-term drag based on a first-quarter outlook from the company that seemed less than market estimates.
With Hon Hai’s shares climbing and Nvidia’s influence in the AI sector growing, this partnership exemplifies how collaboration can drive mutual success in a technology-driven world. The upward movement of Hon Hai shares reflects a broader market trend, signaling the transformative potential of AI in shaping the future of global technology markets.
