AI demand underpins stronger-than-expected Q3 profit for Foxconn

(Sharecast News) - Taiwan's Foxconn posted a stronger-than-expected 17% rise in third-quarter profit on Wednesday, as soaring demand for artificial intelligence servers propelled the world's largest contract electronics manufacturer to record levels of growth and set the stage for a bullish outlook into 2026. The company, formally known as Hon Hai Precision Industry, reported net profit of NTD 57.67bn (£1.42bn) for the July-September period, beating LSEG consensus estimates of NTD 50.4bn.

Revenue stood at NTD 2.06 trillion, broadly in line with expectations.

Shares rose 1.8% in Taipei ahead of the results, extending a 36% gain so far this year.

Chairman Young Liu said on an earnings call that Foxconn expected artificial intelligence to remain the main growth driver next year, underscoring the firm's shift away from its traditional reliance on Apple's iPhone assembly business.

AI-related products now dominate Foxconn's revenue mix.

The company said its cloud and networking division - which includes servers built for Nvidia and other data centre clients - had surpassed its consumer electronics segment for the second straight quarter, accounting for about 42% of total sales.

Cumulative AI server revenue reached around NTD 1trn by the end of September.

Foxconn's close partnership with Nvidia had been central to its expansion.

The company manufactures high-end server racks for data centres used by Amazon, Microsoft and Google to train and deploy large AI models.

Foxconn also teased an announcement involving ChatGPT developer OpenAI at its annual tech day in Taipei next week, though Liu declined to provide details.

Beyond AI, Foxconn said it was pursuing new partnerships in automation and electric vehicles.

It was collaborating with Nvidia, Stellantis and Uber to develop autonomous 'level 4' vehicles and recently signed a memorandum of understanding with Mitsubishi Electric to co-develop energy-efficient AI data centre solutions.

While the company said it expected significant year-on-year revenue growth in the fourth quarter, Liu cautioned that "geopolitical and currency issues" could still pose risks.

He still said Foxconn would continue leveraging its manufacturing scale and AI expertise, however, to capture expanding opportunities in next-generation computing infrastructure.

Reporting by Josh White for Sharecast.com.