This article first appeared on GuruFocus.
Hon Hai Precision Industry’s (HNHPF) latest revenue update suggests AI hardware demand could still have meaningful momentum behind it. The key Nvidia (NASDAQ:NVDA) partner reported April revenue of NT$832.1 billion, or $26.3 billion, representing a 29.7% increase as spending on equipment needed for artificial intelligence remained strong. Hon Hai has built a central role in this cycle by assembling servers that house Nvidia accelerators, making its monthly sales update a closely watched signal for investors tracking the AI infrastructure supply chain.
The broader spending backdrop also remains important. Alphabet (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), Meta (NASDAQ:META), and Microsoft (NASDAQ:MSFT) have announced plans to set aside $725 billion for AI this year, significantly more than previously anticipated. That could possibly support Hon Hai’s AI server business as the major US hyperscalers continue expanding their AI investment plans after the March quarter. Analysts on average expect Hon Hai’s June-quarter revenue to grow 30.4%, while the company said second-quarter sales are expected to rise both sequentially and year-over-year.
Hon Hai’s setup is not limited to AI servers. The Taiwanese company also generates a significant portion of sales from assembling Apple (NASDAQ:AAPL) products, including iPhones and MacBooks, and is positioned to benefit from the strong reception for the latest iPhone 17 product family. For investors, the April revenue jump points to a business sitting between two powerful hardware demand channels: AI infrastructure tied to Nvidia accelerators and consumer-device assembly tied to Apple. That combination could make Hon Hai’s revenue trajectory especially relevant as markets continue weighing whether AI capex and premium smartphone demand can keep supporting the next leg of hardware growth.
