On Thursday, CLSA updated its outlook on Foxconn Industrial Internet (601138:CH) stock, a key player in the technology sector, increasing its price target to RMB28.80, up from the previous RMB26.00. The firm continues to endorse the stock with an Outperform rating, reflecting a favorable view of the company’s potential.
The revision follows Foxconn Industrial Internet’s third-quarter results, which showcased a robust 40% year-over-year and 16% quarter-over-quarter increase in revenue. Net profit, when adjusted for foreign exchange losses, rose by 11%. Notably, the company’s artificial intelligence server revenue surged by 228% year-over-year in the first nine months of 2024. Additionally, AI networking revenue has seen substantial growth, propelled by the demand for 400G/800G switches.
The company anticipates starting production of GB200 racks in November and is poised to become the first global vendor to deliver these products. CLSA expressed optimism regarding Foxconn Industrial Internet’s GB200 project, anticipating it will significantly contribute to the company’s performance in the 2025 fiscal year.
The analyst’s statement highlighted the strong performance and growth prospects, particularly in the AI server and networking segments. The anticipation of the GB200 racks’ production commencement is a key factor in the firm’s positive outlook and the raised price target for Foxconn Industrial Internet.
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