Hon Hai showcases AI server and European AI infrastructure capabilities at Computex; Goldman Sachs maintains Buy (on CL)

Overview

This report is a company research note in the style of conference takeaways by Goldman Sachs on Hon Hai (2317.TW) and its Computex 2026 showcase. On June 2, the analysts visited Hon Hai's booth and focused on AI servers, high-speed interconnect, optical products, spatial data center solutions, and AI model/Agent systems. The report concludes that Hon Hai has demonstrated comprehensive product, manufacturing, and system integration capabilities for AI infrastructure, while advancing AI data center deployment through local partnerships in Europe.

Core views

The core view is to maintain a positive stance on Hon Hai: on the one hand, the company has vertically integrated capabilities across complete AI servers, key components, thermal management, optical interconnect, and system integration; on the other hand, its global supply chain scale and local European partnerships should help it win sovereign AI and AI data center projects. Management remains constructive on the ramp-up in server business driven by higher generative AI penetration and growing AI inference demand.

Analysis framework

The report is based on on-site booth observations and company-announced partnerships, combined with product showcases, supply chain capabilities, progress in European AI infrastructure projects, and Goldman Sachs' valuation framework. Valuation uses a 12-month target price methodology, with the NT$400 target price based on 21.0x 2026E P/E and aligned with the peer PEG&M framework.

Methodology notes

• Valuation method2026E P/E and PEG&M calibration

  Using 21.0x 2026E P/E as the valuation multiple for the target price

  Goldman Sachs maintains a Buy rating on Hon Hai, with a 12-month target price of NT$400 based on 21.0x 2026E P/E; this multiple is set to be consistent with peer PEG&M ratios, i.e., the relationship of P/E to next year's earnings growth and operating margin.

• Factor profileGS Factor Profile

  Four attributes: Growth, Financial Returns, Multiple, and Integrated

  Goldman Sachs Factor Profile compares a stock's growth, financial returns, valuation multiple, and integrated attributes versus the market and sector peers using standardized percentiles, providing investment context.

• M&A scenarioM&A Rank

  A 1-to-3 score assessing the likelihood of a company becoming an acquisition target

  Goldman Sachs discloses that it uses an M&A framework across its global coverage to assess the probability of a company being acquired; rank 1 indicates high probability, 2 medium probability, and 3 low probability. This report does not provide a specific M&A Rank for Hon Hai.

• Data toolQuantum

  Goldman Sachs' proprietary financial database

  Quantum provides historical financial statements, forecasts, and ratio data for in-depth single-company analysis as well as cross-company, cross-industry, and cross-market comparisons.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Hon Hai (2317.TW)

  Research target equity

  Strengths

  R&D capabilities, global supply chain scale, vertical integration across complete AI servers and components, manufacturing and system integration capabilities, and local partnership relationships in Europe.

  Weaknesses

  The report does not emphasize current operating weaknesses; potential shortcomings mainly lie in AI server business, total EV solutions, and global capacity ramp-up falling short of expectations, which would weaken the investment thesis.

  Comparison

  The target price valuation uses 21.0x 2026E P/E and is said to be consistent with peer PEG&M ratios; the report does not provide a company-by-company valuation table.

  Risks

  AI server ramp-up slower than expected, weaker-than-expected performance in total EV solutions across assembly, design, software, and semiconductors, slower-than-expected global capacity ramp-up, and intensifying competition in consumer electronics EMS.

Key data

• Report date2026-06-02The report was published on 2 June 2026 10:53PM HKT.
• RatingBuy (on CL)Goldman Sachs stated that it maintains the buy rating and Conviction List status.
• Target priceNT$40012-month target price, based on 21.0x 2026E P/E.
• Disclosed priceNT$301.50Hon Hai's price as listed in the company-specific disclosures.
• Implied upsideabout 32.7%Estimated by comparing NT$400 with NT$301.50, excluding dividends.
• European AI project investmentinitially more than EUR 120mInitial costs for AI deployment in France are expected to exceed EUR 120m.
• Showcased AI server and interconnect productsVera Rubin NVL72, HGX Rubin NVL8, Groq 3 LPX, Spectrum-X SN66ooThe report presents these showcases as evidence of Hon Hai's manufacturing and system integration capabilities.
• Showcased key components3D VC, manifold, ELSFP, 1.6T optical modulesThe thermal management and optical component displays demonstrate vertical integration.

Impact & implications

If Hon Hai can successfully ramp up AI servers and advance its European AI infrastructure projects, its business mix could further upgrade from traditional consumer electronics EMS toward complete AI infrastructure systems, components, and system integration. Localized cooperation in Europe may also enhance its participation in sovereign AI projects. However, the investment view still depends on realized AI server demand, global capacity ramp-up, EV business progress, and the competitive environment in consumer electronics EMS.

Risks

• AI server business ramp-up is slower than expected.
• Total EV solutions underperform expectations in assembly, design, software, and semiconductors.
• Global capacity ramp-up is slower than expected.
• Competition in the consumer electronics EMS business is more intense than expected.
• The research report discloses that Goldman Sachs has investment banking and non-investment-banking business relationships with Hon Hai, and investors should assess potential conflicts of interest in light of the disclosures.

What to watch

• Progress in AI server orders and capacity ramp-up.
• Whether generative AI penetration and AI inference demand continue to increase.
• Actual execution, investment scale, and delivery pace of AI/Cloud infrastructure projects in France and Europe.
• Commercialization and localized component mass-production progress with partners such as Bull, Radiall, and Thales.
• Whether thermal management, optical components, and high-speed interconnect solutions can generate higher-value vertically integrated revenue.
• Changes in the competitive landscape for total EV solutions and consumer electronics EMS.