NVIDIA's biggest server maker beats estimates with 34% profit jump
What's the story
Foxconn, the world's largest contract electronics manufacturer, has reported a 34% increase in its third-quarter profit. The company's net profit for the July-September period stood at NT$77.5 billion ($2.35 billion), beating analyst estimates of NT$69.6 billion and much higher than last year's NT$57.7 billion. The surge is largely attributed to strong demand for artificial intelligence (AI) products, which Foxconn expects will continue driving growth this year and next.
Growth forecast
Foxconn predicts strong revenue growth this year
Foxconn, formally known as Hon Hai Precision Industry, also reported a 47% year-on-year increase in third-quarter revenue.
The company has maintained its earlier prediction of "strong" revenue growth for this year. It also anticipates high demand for AI products throughout this year and into next.
While Foxconn doesn't provide numeric forecasts, it has predicted "high double digit growth" in 2027 for AI rack shipments.
Strategic moves
Foxconn's shares lag behind broader Taiwan index
Foxconn, a major assembler of Apple's iPhones and NVIDIA's biggest server maker, is expanding its operations beyond China.
The company now makes most of the iPhones sold in the US in India. It is also setting up factories in Mexico and Texas to manufacture AI servers for NVIDIA.
Despite these strategic moves, Foxconn's shares have only risen 4% this year, lagging behind a 49% gain on the broader Taiwan index.