Foxconn has good news about Nvidia and not-so-good news about Apple

The release of earnings from Hon Hai, better known as Foxconn, offers some useful perspective on the near-term outlook for some US megacap tech stocks.

The Taiwanese giant has its fingerprints on everything in the electronics space, especially smartphones and the cloud.

Some reassuring news for Nvidia and its ilk: Hon Hai’s AI server business is on track to double year on year, the company said. 2025 estimates don’t really appear to be at the heart of the market’s worries about the AI trade. But given the magnitude of the sell-off in AI-linked semiconductor, server, and data center names, every bit of good news helps.

The better news? When it comes to investment in AI infrastructure, “We will not see the peak this year,” Chairman Young Liu said.

For Apple, there isn’t much in the way of optimistic messaging to point to. While Hon Hai didn’t provide specific guidance, these arrows tell you what management thinks of the relative 2025 outlook for its smart consumer electronics division (where iPhones play a big role) versus its cloud and networking products business (which is geared toward AI servers).

Liu even warned of an imminent changing of the guard, saying that cloud and networking products would supplant consumer electronics as its top revenue driver “very soon.”