On Thursday, JPMorgan (NYSE:JPM) reaffirmed its Overweight rating and NT$250.00 price target for Hon Hai (TW:2317) Precision Industry Co Ltd. (2317:TT) (OTC: HNHPD). The technology giant, also known as Foxconn (SS:601138), reported November sales of approximately NT$672.6 billion, marking a 3.5% increase year-over-year (YoY), but a 16.4% decrease month-over-month (MoM). These figures represent 71.3% of JPMorgan's forecast for the fourth quarter of 2024.
The company's growth has been primarily driven by its Cloud and Networking products, particularly due to a robust ramp-up in AI server production. Hon Hai has secured a significant share in Nvidia’s Hopper modules and baseboards, which has been a key factor in its performance this year. However, the analyst predicts that the momentum for AI servers may decelerate in the fourth quarter as the industry transitions to the Blackwell series.
The current market sentiment towards Hon Hai's stock may be affected by challenges in the supply chain, specifically with the GB200 components, and a slower ramp in rack-level shipments. These issues are expected to influence the stock's performance in the short term.
Looking ahead, JPMorgan anticipates a resurgence of investor interest in Hon Hai around the middle of the first quarter of 2025. This forecast hinges on the clarity of the GB200 ramp-up. Hon Hai is expected to capture approximately 50% of the market share for GB200 racks and is also projected to lead in the GB300 and potentially the Vera Rubin architecture market shares.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.