Nvidia supplier Foxconn third-quarter profit beats expectations, rising 17% on AI demand

Foxconn, the world’s largest contract electronics maker, said Wednesday that third-quarter profit rose 17% from a year earlier, driven by growth in its artificial intelligence server business.

Here’s how Foxconn The September quarter compared to LSEG SmartEstimates, which are weighted by analysts’ estimates, which are more consistently accurate:

• Revenue: $2.06 trillion in New Taiwan dollars ($66.29 billion) and NT$2.06 trillion expected
• Net profit: NT$50.41 billion versus NT$57.67 billion

Foxconn, officially known as Hon Hai Precision Industry, is known as the world’s largest electronics manufacturer. AppleIt’s leaning towards iPhones but diversifying into other business areas, including artificial intelligence. The firm produces server racks designed for AI workloads and has become a major partner of American AI chip darling. Nvidia.

The company said it expects operations to maintain quarterly sustained growth in the second half of the year (the traditional peak season), citing stronger AI server shipments and increased demand for information and communications technology products.

However, Foxconn warned that global political and economic uncertainty, as well as exchange rate fluctuations, should be closely monitored.

Foxconn reported that its ‘Cloud and Networking’ segment recorded strong year-on-year growth, supported by demand for AI server racks.

Foxconn’s server manufacturing business is currently in a strong growth phase, supported by strong demand, Ivan Lam, a senior analyst at Counterpoint Research, told CNBC.

Lam said the company leveraged its dominance in contract manufacturing to secure both current and future orders, describing this as a clear example of “chasing cash”; It’s a strategy that naturally involves sacrificing some consumer electronics orders.

He added that Foxconn’s push into high-growth server manufacturing is “clearly paying off,” even as it sheds some of its consumer electronics footprint for longer-term momentum.

While component price volatility, currency fluctuations and logistical challenges could pressure margins, Lam said she expects Foxconn’s fourth-quarter results to “remain positive.”

Foxconn signed memorandum of understanding On November 6, it will jointly supply energy-efficient artificial intelligence data center solutions with Mitsubishi Electric worldwide. In addition to artificial intelligence data centers, Foxconn and Mitsubishi Electric They plan to explore additional new business models and solutions using their combined technology and information capabilities.

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