Hon Hai (Foxconn) (HNHPF)
The desk's stance
On our research list, not on the slate.
What the company does
Assembles the majority of the world’s iPhones — Apple is roughly half of its revenue — while spreading the lines from China to India (now a meaningful share of US-bound iPhones) to sidestep tariffs, and building Nvidia AI servers on the side. Trades in Taipei; the US ticker is a thin OTC listing.
In short: Global electronics contract manufacturer. Category: Mega-Cap AI Infrastructure Assembly. Sector: Technology, Electronic Components.
G-Street Value and Score
G-Street Value: $18.45, computed Oct 18, 2026 (confidence: medium).
How we got there: 50% analyst leg $21.16 (1 analyst target, credibility- and freshness-weighted, after 8% optimism discount) + 50% GainStreet factor value $15.73 (22.44× fwd EPS anchored to hardware multiples).
G-Street Score: 50 out of 100 (Weak).
- Top-line growth & guidance: 25 of 32
- Margin power: 0 of 15
- Revenue visibility & quality: 5 of 11
- Profitability & balance sheet: 11 of 24
- Capital allocation & governance: 3 of 6
- Valuation, sentiment & momentum: 6 of 12
Our current thesis
Updated Oct 13, 2026
The thesis
- Dominant share in Nvidia GB200/Rubin rack assembly fuels 40%+ top-line acceleration.
- Internal manufacturing of liquid cooling and power delivery components helps cushion assembly margins.
- Deep tier-one hyperscaler and Apple partnerships secure massive multi-year enterprise and consumer backlogs.
Risks
- Razor-thin 2.3% net margins leave zero margin of safety compared to peer TSM's 50%.
- Heavy working capital build for server racks drove Q2 free cash flow negative NT$117.7B.
- Forward P/E of 22.1x trades at an unearned premium over foundry leader TSM's 19.9x.
What we're watching
- Q3 2026 earnings on November 12, 2026 for operating margin expansion and cash recovery.
- Component availability and delivery pace during Nvidia GB200/Rubin mass rack production ramp.
- Price action testing intermediate support at $15.00 versus upper resistance around $18.50.
Latest
Hon Hai trades at $15.50 (22.1x forward P/E), consolidating well below its 52-week peak of $20.26 despite Q2 2026 revenue expanding 40.8% YoY to NT$2.53T. Booming AI server rack deployments continue to drive top-line acceleration, though working capital outlays for component inventory swung Q2 free cash flow to -NT$117.7B against narrow 2.3% net margins. The upcoming Q3 2026 earnings call on November 12, 2026 will test whether rack delivery scale can finally unlock operating leverage.
Key numbers
As of Oct 16, 2026: market cap $103.7B · revenue growth +40.8% year over year · gross margin 6.1% · net margin 2.3% · forward P/E 21.0.
Analyst price targets
Published analyst targets we could trace to a named source.
- Barclays, Overweight: $23 target (August 2026). Source: marketbeat.com
On the Gainz Lab maps
Who it does business with
- Hon Hai (Foxconn) supplies Apple — iPhone assembly (about $120.0B a year). Research estimate: Apple accounts for close to half of Hon Hai’s revenue, most of it pass-through component cost on assembled iPhones.