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Foxconn Founder Achieves Long-Awaited Stock Price Milestone
Terry Gou, the billionaire founder of Foxconn Technology Group, has finally achieved an illustrious goal that has been nearly a decade in the making. Shares of Hon Hai Precision Industry Co., the flagship entity of Gou's enterprise, closed at NT$200 ($6.18) this Monday. This stock price target was originally set by Gou back in 2016.
The notable surge of over 90% this year is attributed to investor excitement surrounding artificial intelligence (AI) servers and potential advancements in Apple's latest products. Despite stepping down as chairman to pursue the Taiwanese presidency unsuccessfully, this price milestone marks a significant achievement for the company Gou established half a century ago.
Transformation and Evolution
During annual general meetings in past years, shareholders consistently questioned when Gou's ambitious stock price target would be reached. This year's meeting highlighted how the company has transformed and diversified into new domains such as AI servers and electric vehicles. The company projects AI servers to become a NT$1 trillion business in the near future.
The remarkable performance of Hon Hai this year, along with other Taiwanese tech firms like Quanta Computer Inc., signifies a broader shift among the island’s contract manufacturers. These companies have transitioned from producing low-margin, commodity IT products to creating higher value-added offerings.
Investor Sentiment and Future Outlook
According to Xiadong Bao, a fund manager at Edmond de Rothschild Asset Management, "The AI wave lifts all boats." Bao points out that Hon Hai’s stock rally is largely fueled by the ramp-up of AI servers, expansion into AI-related networking equipment, and high expectations for a recovery in the general server and PC markets.
Record Revenue Performance
Hon Hai reported a substantial 22% revenue increase in May, setting a new record for the month. The company anticipates surpassing expectations for the traditionally weaker second quarter, driven by stronger than anticipated demand for AI servers. These results are expected to be officially reported in August.
The transformation and impressive performance of Hon Hai in 2023 underscore an important evolution within the tech manufacturing sector in Taiwan, highlighting the increasing importance of AI and high-value technological advancements in these companies' growth strategies.
