From Micron to Hon Hai: AI Industry Chain Performance Continues to Exceed Expectations, High Global Infrastructure Spending Continues

The Zhitong Finance App learned that Nvidia (NVDA.US) partner Hon Hai Precision announced better-than-expected quarterly revenue, indicating that global AI infrastructure spending remains high. In the three months ending September, Hon Hai's total revenue was NT$3.03 trillion (approximately US$95.4 billion), an increase of 47% over the previous year. Analysts expected an average of NT$2.83 trillion.

Prior to Hon Hai's strong revenue growth, Micron Technology (MU.US) released optimistic performance guidelines last week, further proof that AI spending continues to rise. Despite calls from executives such as Sam Altman of OpenAI and Dario Amodei of Anthropic to slow down the development of AI and ensure that it remains under human control, this spending momentum has not abated.

According to the data, Micron's fourth fiscal quarter revenue was $54.23 billion, up 379% year on year, up 31% month on month, setting a record for six consecutive quarters; adjusted earnings per share of $33.42, up more than tenfold year over year; guidance for the next fiscal quarter also far exceeded expectations: the median revenue guide was $61.5 billion, higher than Wall Street's forecast of $57.57 billion; the median value of the adjusted earnings per share guide was $38.15, higher than Wall Street's forecast of $35.81 billion.

Hon Hai is Nvidia's server assembly partner and has benefited from the global boom in cloud infrastructure construction over the past two years. As investors' concerns about overcapacity, rising debt levels, and regulatory setbacks grow, the company's sales are seen as a weather vane for how the AI industry is developing. Its share price has risen about 10% since the beginning of the year.

Foxconn's parent company, Hon Hai, still has a significant portion of its revenue from the low-profit margin business of OEM for Apple. Hon Hai is the main iPhone assembler and has factories in China and India.

Analysts Steven Tseng and Rebecca Wang said, “In the next few years, driven by AI infrastructure demand, Hon Hai is expected to maintain 25%-35% revenue and profit growth. With deep vertical integration and global layout, Hon Hai has significant advantages in the context of increasingly complex servers and growing demand for localized production. The cloud computing business has surpassed the smart consumer electronics business to become the company's largest business segment. As capital expenditure expands from hyperscale cloud vendors to new clouds, sovereign AI, and enterprise-level buyers, Hon Hai's sales are expected to rise further.”