Bubble or no bubble, this is the best stock for AI exposure: analyst
Investing.com - HSBC has upgraded Foxconn Industrial Internet (601138:CH) from Hold to Buy and doubled its price target to RMB92.00 from RMB46.00, citing strong growth in AI-related segments.
The upgrade follows Foxconn Industrial Internet’s impressive third-quarter 2025 results, which showed net profit of approximately RMB10.4 billion, representing a year-over-year increase of about 62%. The company also provided positive fourth-quarter guidance, projecting a twofold year-over-year increase in server revenue.
HSBC attributes this growth to robust expansion in cloud computing and networking segments, driven by significant AI capital expenditure investments from global cloud service providers. The firm has raised its 2025-27 net income estimates for Foxconn by 11-39%.
Despite Foxconn shares rising 44% over the past three months, compared to the CSI 300 index’s 9% gain during the same period, HSBC believes the current share price still does not fully reflect the company’s growth potential.
The bank specifically highlighted three growth drivers: sustained momentum in 800G switches supported by AI cluster scale-out, promising NVL rack shipments with market share gains, and underappreciated ASIC server monetization opportunities.
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