Optimism regarding AI is reflected in Foxconn, the largest electronics manufacturer and a notable partner of Nvidia and Apple. Foxconn anticipates AI’s massive potential through the company’s growth until 2026. Foxconn Chairman Young Liu outlined the company’s expectations regarding its development and AI needs, emphasising the potential in the AI industry.
The company remains vigilant to the potential threats from unstable geopolitical and currency conditions. Liu suggested that the AI strength business has enormous growth potential, even in its infancy stages.
AI Servers Overtake Smartphones
For the first time in the company’s history, AI cloud and networking revenues have surpassed earnings from consumer electronics, including iPhones, for two consecutive quarters. This transformation has positioned Foxconn to capitalize on the significant pivot in global tech spending, mainly as companies like Amazon, Microsoft, and Google invest in AI data centres.
Foxconn’s business model has positioned the company to capitalize on recent shifts in global technology investment. The changes in technology investment shape the company’s performance. Foxconn’s performance is a key indicator of global shifts in technology investment.
Financial Results Exceeded Predictions
The company has performed well in the third quarter, with net profit increasing by 17% to T$57.67 billion approximately $1.89 billion. This exceeded market expectations by a considerable margin, reaching T$50.4 billion. According to Foxconn, AI servers contribute a lot to this growth.
The company anticipates continued growth into the fourth quarter, building on the momentum it has experienced earlier this year. Although Foxconn did not provide specific numbers, the company continues to offer full-year strong growth guidance, suggesting a more general positive trend.
Alluding to an OpenAI Announcement
To further entice the audience, Liu has mentioned that there will be a Foxconn OpenAI announcement at the company’s tech day in Taipei next week, but did not elaborate on the details. Still, it has grabbed the tech industry’s attention. OpenAI, the company behind ChatGPT, has yet to provide commentary. A Foxconn OpenAI partnership could offer new avenues for AI hardware, cloud systems, and edge computing.
Foxconn’s Future Prospects
Although the manufacturing of AI servers is the fastest-growing segment of Foxconn’s business, the company is also diversifying into electric vehicle manufacturing. Foxconn’s electric vehicle business has continued to yield mixed results. Earlier this year, Foxconn’s plans to manufacture electric vehicles hit a significant speed bump, and as a result, the company sold a former car factory in Ohio for $375 million. Despite this, the company is determined to diversify its business successfully and move beyond its core business of smartphones and consumer electronics.
Foxconn’s stock has increased by 36% this year
Foxconn’s stock has risen 36% so far this year, outperforming Taiwan’s main stock index, which has gained 21% this year. Investors are reacting to the company’s strong earnings, as well as the company’s growing importance in the AI supply chain. Foxconn’s stock rose 1.8% on Wednesday as investors showed confidence in the firm’s strategic direction ahead of its earnings release.
Outlook for 2026
Foxconn’s prospects for 2026 appear promising, given the strong financial results in 2023, the anticipated surge in demand for AI, and the upcoming announcement with OpenAI. Foxconn is shifting its identity from being primarily known as an iPhone assembler to becoming a significant player in global AI infrastructure. AI is in its infancy, as Foxconn’s Chairman Liu put it, and the company is ready to lead the industry.
