Nvidia Stock Soars with Foxconn on AI Server Expansion

Nvidia’s stock experienced a modest increase on Wednesday, rising approximately 1.6% in premarket trading, reaching $196.24. This uptick followed a period of decline after SoftBank announced a significant sale of $5.8 billion worth of Nvidia shares. The timing of this movement is crucial, as Nvidia is set to release its quarterly earnings report on November 19. Investors are keenly observing demand trends for the company’s AI and data center products, particularly as AI technology continues to expand rapidly.

Nvidia Stock Soars Amid Foxconn’s AI Server Expansion

Foxconn Technology Group, notably recognized for manufacturing iPhones for Apple, reported robust demand for artificial intelligence hardware. As of this week, AI servers and related cloud products represented 42% of Foxconn’s total revenue, surpassing its smart consumer electronics sector as its leading business line for the second consecutive quarter.

Key Financials from Foxconn

• Cumulative AI server revenue: 1 trillion New Taiwan dollars (approximately $32.2 billion) as of September 30.
• AI hardware demand driven by global requirements for systems utilizing Nvidia technology.

This growth highlights Foxconn’s strategic partnerships with Nvidia, as both companies collaborate on AI infrastructure projects essential for expanding the production capacity needed to satisfy the escalating global demand for GPUs.

Nvidia’s Outlook Before Earnings Report

The latest developments from Foxconn indicate that Nvidia’s order pipeline remains solid despite recent fluctuations in its share price. The chipmaker’s data center business, the largest revenue driver, has contributed significantly to its record growth over the past year. Analysts anticipate that Nvidia’s upcoming earnings report will reinforce strong performance in AI server shipments, although there are warnings regarding a potential slowdown in consumer GPU sales.

Competitor Advanced Micro Devices (AMD) also saw positive movement, with a rise of over 5% on reports forecasting annual revenue growth exceeding 35% over the next three to five years, fueled by AI processor demand.

As Nvidia prepares for its earnings announcement, investors remain vigilant, banking on indications of sustained strength in the AI sector and the overall market dynamics.