Investing.com -- Shares of leading semiconductor companies including Nvidia (NASDAQ:NVDA), AMD (NASDAQ:AMD), Micron (NASDAQ:MU), and Broadcom (NASDAQ:AVGO) climbed in Monday’s premarket trading, responding to positive revenue growth news from Nvidia’s server assembly partner, Hon Hai (TW:2317) Precision Industry Co., also known as Foxconn (SS:601138).
Foxconn, which is also the world’s largest manufacturer of Apple Inc (NASDAQ:AAPL).’s iPhones, reported a 15% revenue increase, surpassing expectations due to continued demand for AI infrastructure. The company’s December revenue surged by 42%, contributing to an overall revenue of NT$2.13 trillion ($64.6 billion) for the quarter. This robust performance led to a 3.6% rise in Foxconn’s shares in Taipei, marking their most significant intraday gain in roughly two weeks.
The upbeat results from Foxconn have provided a lift to semiconductor stocks, with Nvidia rising by 2.6%, AMD by 3%, Micron by 5.8%, and Broadcom by 1.1%. The demand for AI infrastructure, driven by substantial investments in data center servers by major U.S. tech firms such as Alphabet (NASDAQ:GOOGL) Inc. and Microsoft Corp (NASDAQ:MSFT)., has been a boon for Taiwan’s AI hardware suppliers, including Foxconn.
Despite the positive momentum, there is a sense of caution among investors about the sustainability of the expansion. Nevertheless, Foxconn’s forecast for "significant" sales growth in the first quarter has contributed to the optimistic sentiment in the semiconductor sector.
The semiconductor industry’s performance is closely watched, as it is a bellwether for the broader tech sector and a key indicator of global economic health. The recent gains in semiconductor stocks suggest that investors are currently focusing on the potential of AI and data center growth to drive demand, despite underlying concerns about the market’s future trajectory.
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