The Taiwanese maker of Apple Inc’s iPhones rose as much as 5.1% to NT$156 on Thursday. Shares took off this month as its strong quarterly earnings fuelled optimism over demand for the company’s AI servers.

The AI craze has brought big gains in companies like Nvidia Corp as investors see massive growth potential for the sector. Hon Hai’s AI server revenue is likely to reach 18% of its total revenue in 2025 due to the rising share of Nvidia shipments, JPMorgan Chase & Co analysts including Gokul Hariharan wrote in a note Wednesday.

To be sure, Hon Hai’s total revenue exposure to AI is likely to remain at 10% to 12% this year, compared with about 20% for its competitors like Wiwynn Corp, Quanta Computer Inc and Wistron Corp, according to a JPMorgan note earlier this month.

The rally may have gotten excessive, as Hon Hai is now among the most overbought stocks on Taiwan’s benchmark index in terms of 14-day relative strength, according to Bloomberg-compiled data. The stock has advanced 49% so far this year in spite of Apple’s slowing sales in China.

Still, analysts see the positive story for Hon Hai continuing, with Goldman Sachs Group Inc, Morgan Stanley and Citigroup Inc all lifting their price targets for the stock this month. JPMorgan analysts raised the target by 21% to NT$170 this week.

Ramp-ups for AI servers and EVs are key drivers for Hon Hai in 2024, Goldman analysts including Allen Chang wrote in a note, adding that the firm’s valuation is still attractive given stronger earnings growth ahead. The brokerage’s target for Hon Hai stands at NT$172, the highest on the Street.