tech

Rani Molla8/14/25

Foxconn’s Nvidia business is surging while its Apple business shrinks

Taiwan’s Hon Hai Technology Group, better known as Foxconn, said in its second-quarter earnings report that it expects its AI server revenue to more than double in the current quarter, thanks in part to hefty demand from partners like Nvidia. Meanwhile, it expects its consumer electronic business, which includes manufacturing Apple’s iPhones, to shrink.

Behold, the company’s 2025 outlook in slide form:

Hon Hai 2025 business outlook — Hon Hai Technology

Back in March, Hon Hai Chairman Young Liu warned of an imminent changing of the guard, with server products poised to assume the top slot as a driver of sales. And in Q2, the company’s server products made up the largest portion of its revenue — 41% — for the first time, while consumer electronics declined to 35%.

Apple has seen sales of its iPhones lose steam, while companies that manufacture AI products can’t keep up with demand.

“Major cloud service providers are raising their spending, and governments around the world are rolling out sovereign AI projects. This shows overall AI demand still outstrips supplies,” Hon Hai rotating CEO Kathy Yang said on the earnings call. “Our group is aggressively expanding our capacity to meet the swiftly growing demand.”

Tariffs remain a concern for the company, which is expanding production in the US in hopes of being exempted.

Overall, Foxconn’s net income rose 27% last quarter, better than analysts expected, and revenue grew 16%, which was in line with expectations.

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Jefferies downgrades Apple to “underperform,” calls iPhone sales expectations “excessive”

Sure, Apple’s latest iPhone is selling better than some previous models, but that’s already reflected in the stock, Jefferies analysts wrote in a note today. In it they downgraded the stock to “underperform” and kept the price target roughly flat at $205.

The analysts argue the sales bump stems from high trade-in values and the lack of price hikes, rather than “new form factor or tech innovations.” As we recently noted, it could also have something to do with a natural upgrade cycle rather than consumers going nuts over NITS.

The analysts say the positive sales momentum for the iPhone 17 has engendered “excessive expectations” for the replacement cycle as well as for the company’s upcoming foldable iPhone.

“We do not doubt AAPL will be able to make the most beautiful foldable phone in the market, but the question is the TAM [total addressable market] of a US$2K phone,” they wrote.

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JPMorgan reiterates “underweight” rating after Tesla delivery beat

While Tesla delivered a massive delivery beat yesterday, JPMorgan analyst Ryan Brinkman wants to remind investors to put that beat into context:

He noted that the surge was likely a temporary one thanks to pulled-forward demand by consumers hoping to capitalize on the $7,500 tax credit that ended September 30. That pull forward will necessarily mean fewer purchases later, and the end of the tax credit “ultimately will negatively impact Tesla deliveries as soon as October 1.” He added that the analyst consensus still expects Tesla’s full-year sales to decline.
Tesla’s beat, Brinkman said, was in part due to analysts having dramatically lowered their previous estimates amid falling sales. While the nearly 500,000 deliveries in Q3 were about 12% higher than the analyst consensus right before the numbers came out, he noted that analyst expectations have been grinding lower for years. He pointed out that Street estimates for Q3 2025 deliveries peaked at 1.1 million in 2022. While the company missed that peak estimate by 56%, the stock is up 81% in the intervening years.

JPMorgan raised its third-quarter earnings-per-share and free cash flow estimates on the delivery numbers, but reiterated its “underweight” rating for the stock.

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OpenAI’s Sora has bumped Google’s Gemini and OpenAI’s ChatGPT from the top of the App Store

OpenAI’s AI-only social media app, Sora, launched three days ago and is already No. 1 on the US free App Store, where it has displaced regular favorite AI apps Gemini from Google and ChatGPT, OpenAI’s main app. It’s an especially impressive feat given that for now the highly addictive, legally murky app is invite-only.

Of course, many a buzzy app has surged up the App Store ranks only to fizzle over time. We’ll see what happens with Sora.

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OpenAI’s hot Sora video app is a copyright lawsuit waiting to happen

OpenAI has generated some serious buzz surrounding its new Sora video generation app. The app is currently No. 3 on the iOS free app leaderboards, even though it’s invitation-only for the time being.

But users have been flooding social media with videos generated by Sora, and in addition to a “Skibidi Toilet” Sam Altman and the OpenAI CEO dressed as a Nazi, the app is able to create videos featuring iconic characters from Disney, Nintendo, and Paramount Skydance.

On the system card for the Sora 2 AI model (which powers the Sora app), OpenAI says it was trained on things found on the internet:

“Sora 2 was trained on diverse datasets, including information that is publicly available on the internet, information that we partner with third parties to access, and information that our users or human trainers and researchers provide or generate.”

This seems like an invitation for a big copyright lawsuit, along the lines of the one Disney, Dreamworks, and NBCUniversal recently filed against AI image generator Midjourney.

But OpenAI is trying to flip the responsibility of protecting copyrighted material to the intellectual property owners themselves. According to The Wall Street Journal, OpenAI is allowing copyrighted material in Sora by default, unless copyright holders opt out of the service.

The courts will have to decide if this novel approach to intellectual copyright law works, but government regulators may not be that big of a problem, as Altman has made sure OpenAI is in the good graces of the Trump administration. If OpenAI has to pay up to copyright holders after a lawsuit, what’s a few billion dollars here or there when you’re raising so much capital?

OpenAI’s AI video app stirs copyright questions, pumping out videos of Mario and Pikachu

OpenAI’s AI video app stirs copyright questions, pumping out videos of Mario and Pikachu

On the system card for the Sora 2 AI model (which powers the Sora app), OpenAI says it was trained on things found on the internet:

“Sora 2 was trained on diverse datasets, including information that is publicly available on the internet, information that we partner with third parties to access, and information that our users or human trainers and researchers provide or generate.”

This seems like an invitation for a big copyright lawsuit, along the lines of the one Disney, Dreamworks, and NBCUniversal recently filed against AI image generator Midjourney.

But OpenAI is trying to flip the responsibility of protecting copyrighted material to the intellectual property owners themselves. According to The Wall Street Journal, OpenAI is allowing copyrighted material in Sora by default, unless copyright holders opt out of the service.

The courts will have to decide if this novel approach to intellectual copyright law works, but government regulators may not be that big of a problem, as Altman has made sure OpenAI is in the good graces of the Trump administration. If OpenAI has to pay up to copyright holders after a lawsuit, what’s a few billion dollars here or there when you’re raising so much capital?

Tesla delivered way more Teslas than it produced last quarter

That’s helping it claw its way through its surplus.

GOP Lawmakers In D.C. Poised To Vote On Waivers That Allow California To Set Own Emissions Standards

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