Foxconn Beats Expectations with Strong AI Server Demand, Forecasts Growth

Taiwan’s Foxconn, the world’s largest agreement electronics manufacturer, and Apple’s main iPhone assembler, reported better-than-expected quarterly revenue driven by robust demand for AI servers.

The company anticipates continued growth in the upcoming quarter, which is traditionally a peak period for supplying smartphones and electronics to Western markets.

AI Server Demand Boost:

Foxconn attributes its strong performance to heightened demand for servers in artificial intelligence (AI) applications, particularly from customers like Nvidia, a leader in AI technologies. This segment’s growth is expected to drive revenue increases year-on-year and quarter-on-quarter in the third quarter.

While Foxconn does not provide specific numerical forecasts, it highlighted significant year-on-year revenue growth in recent months, including a 16.1% increase in July and a substantial 19.1% rise in second-quarter revenue, surpassing analyst expectations.

Segment Performance by Foxconn:

The company noted exceptional growth in its cloud and networking products segment, fueled by AI server demand. However, revenue from smart consumer electronics, including smartphones, remained flat year-on-year, although no specific reasons were provided for this stagnation.

Foxconn’s shares have surged 105% year-to-date, significantly outperforming the broader Taiwan market’s 31% increase. Despite a flat closing ahead of the revenue release, investor sentiment remains positive as the company prepares to announce its second-quarter earnings on August 14.