Foxconn Industrial Internet: May revenue up 40% YoY, AI servers drive growth, Buy rating maintained
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Foxconn Industrial Internet: May revenue up 40% YoY, AI servers drive growth, Buy rating maintained
Goldman Sachs maintains a Buy rating on Foxconn Industrial Internet with a target price of TWD 400, expecting 2Q26 revenue to grow 31% YoY
- Foxconn Industrial Internet's May revenue increased 40% YoY and 3% QoQ
- AI server business continues to grow, becoming the main driver
- Expected 2Q26 revenue to grow 31% YoY and 11% QoQ
- Maintains Buy rating, target price TWD 400
- Current stock price 284.50, potential upside 40.6%
- EV subsidiary Foxtron expanding into new energy vehicles brings incremental opportunities
Report interpretation
Overview
Goldman Sachs released a research report on Foxconn Industrial Internet (2317.TW), noting that its May revenue grew 40% year-on-year and 3% quarter-on-quarter, primarily benefiting from strong performance in the AI server business. The company expects 2Q26 revenue to grow 31% YoY and 11% QoQ, and maintains a Buy rating with a target price of TWD 400.
Core views
The growth potential of Foxconn Industrial Internet in the AI server sector is the core highlight. Its EV subsidiary, Foxtron, is expanding into new energy vehicle-related businesses, bringing new growth points for the group. Although the second quarter is typically a traditional off-season, the AI server business is still expected to drive performance beyond expectations. The company's fundamentals are solid, and valuations are at reasonable levels, so the Buy rating is maintained.
Analysis framework
The report analyzes dimensions such as revenue growth rate, gross margin changes, and valuation comparisons. It focuses on tracking the growth of the AI server business and market share expansion potential, while also paying attention to new growth points brought by the new energy vehicle business. Combining historical financial data with industry trends, it judges future profit growth momentum.
Methodology notes
Evaluates stock value using the ratio of P/E ratio to earnings growth rate
The report believes Foxconn Industrial Internet's PEG is higher than historical levels, reflecting its growth potential in emerging fields such as AI servers
Analyzes demand-side growth and supply-side competitive landscape of AI servers
The report emphasizes the rapid rise in AI server demand, and Foxconn Industrial Internet is expected to gain market share凭借 its supply chain advantages
Assesses corporate profitability and cash flow health
The report points out that Foxconn Industrial Internet's free cash flow remains stable, supporting its long-term growth capability
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Foxconn Industrial Internet (2317.TW)Core target, benefiting from AI server business growth
- Strengths
- Global leader in electronic manufacturing with strong supply chain integration capabilities
- Weaknesses
- Slowing growth in traditional consumer electronics business
- Comparison
- Faster AI server business growth compared to peers
- Risks
- AI server market demand falling short of expectations
- Foxtron (2258.TW)Subsidiary, benefiting from new energy vehicle business expansion
- Strengths
- Early layout in the new energy vehicle field with sufficient technical reserves
- Weaknesses
- Fierce market competition putting pressure on profit margins
- Comparison
- Richer customer resources compared to同业 (peers)
- Risks
- Changes in new energy vehicle policies
Key data
- May RevenueTWD 85.9 billion+40% YoY, +3% QoQ
- 2Q26 Revenue ForecastTWD 2.4 trillion+31% YoY, +11% QoQ
- Target Price400.00Based on 21x 2026 P/E
- Current Price284.50Potential upside 40.6%
- PE Valuation21xHigher than historical average but reflects growth expectations
Impact & implications
The continued growth of Foxconn Industrial Internet in the AI server sector will significantly enhance profitability, while EV business expansion provides new performance growth points for the group. Investors are advised to monitor the implementation of AI server orders and progress in the new energy vehicle business, while being vigilant about global supply chain volatility risks in the short term.
Risks
- AI server market demand falls short of expectations
- Global supply chain volatility affects production
- Intensifying competition in the new energy vehicle business
What to watch
- Progress in AI server order delivery
- Progress in Foxtron's new energy vehicle business
- Actual revenue performance in 2Q26