Foxconn (SS:601138) Industrial Internet (601138:CH), a prominent player in the AI infrastructure supply chain, has maintained its Buy rating and RMB29.95 price target from Goldman Sachs analysts. The firm’s optimistic outlook is based on Foxconn Industrial Internet’s projected growth by 2025, which is expected to be fueled by several key developments in the company’s operations.
The analysts at Goldman Sachs believe that the company’s growth will be driven by the ramp-up of next-generation AI servers, a rebound in networking equipment, and an expansion in the data center business that encompasses AI servers and networking equipment, as well as a recovery in general servers. These factors are anticipated to contribute significantly to the company’s performance in the coming years.
Foxconn Industrial Internet’s research and development capabilities, along with its global production sites and strong balance sheet, are cited as competitive advantages. The company’s comprehensive offerings, including GPU modules, baseboards, computing boards, switch trays, AI servers, and liquid cooling solutions, are also highlighted as strengths that position it well to serve leading cloud service providers (CSP) clients.
The company’s strategic shift away from the highly competitive consumer electronics market, particularly the smartphone metal middle frame segment, towards the more robust growth potential of the data center market is also seen as a positive move. This diversification is expected to help Foxconn Industrial Internet capitalize on the growing demand for data center services.
Goldman Sachs’ endorsement reflects confidence in Foxconn Industrial Internet’s strategic direction and its potential to leverage its strengths in the AI infrastructure supply chain to achieve substantial growth by 2025.
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