Hon Hai Precision Healthy July revenue growth; 2026 AI revenue upside from Vera Rubin ramp and incremental TPU tray opportunity

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

05 August 2026

Hon Hai Precision

Healthy July revenue growth; 2026 AI revenue upside

from Vera Rubin ramp and incremental TPU tray

opportunity

Overweight

2317.TW, 2317 TT

Price (05 Aug 26):NT$258.50

Price Target (Jun-27):NT$310.00

July sales driven by ongoing AI and iPhone momentum, as well as PC pullin demand: Hon Hai reported July sales of NT$946.5bn, up 15% MoM and

54% YoY. We believe the healthy MoM growth was driven mainly by strong

growth in the Cloud and Networking segment, supported by robust AI server

demand and improving component supply for AI racks vs. the prior month. The

Computing Products and Smart Consumer Electronics segments also posted

strong and significant MoM growth, driven by PC pull-in demand for summer

promotions and continued iPhone 17 momentum.

3Q26 sales remain solid; 3Q guidance unchanged: Hon Hai's July revenue

reached 37%/35% of JPMe/BBGe for 3Q26. The company reiterated its 3Q

guidance of revenue growth on both a QoQ and YoY basis, with AI servers

remaining the key growth driver and iPhone momentum continuing. Overall,

we expect 3Q26 revenue to grow 8% QoQ and 23% YoY, driven by 10%+ QoQ

growth in AI server revenue (implying 7.5K+ GB rack shipments in 3Q26),

partially offset by lackluster PC demand amid the absence of the 1H26 pull-in

demand that was driven by concerns over further memory price hikes.

Strong AI server growth in 2026, with upside from Vera Rubin ramp and

new product win from ASIC customer: We expect Hon Hai’s AI server

revenue to grow 110%+ in 2026 (implying ~165% YoY growth in AI GPU

racks), with some pricing upside for GB300, given rising memory and other

component costs. We believe the key upside to Hon Hai’s 2026 AI server

revenue will come from an earlier-than-expected Vera Rubin ramp, supported

by Hon Hai’s higher market share in the VR generation on the back of a new

customer win (Google, in our view) and 60%+ higher ASPs vs. the current

GB300 generation. Despite some VR200 PCB issues seen in July, we do not

expect further delays; VR200 remains on track to enter mass production in late

3Q26 to 4Q26, with industry ~10K-15K VR rack shipments this year. On the

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