Taiwan’s Foxconn, the world’s largest contract electronics supplier, reported a 91% jump in quarterly profit, due to AI server demand.
The price of Foxconn (TWSE:2354) has found a price bottom below the $50 level. Price has now rallied through the $55 barrier from August 2024 and can push higher if it holds as support.
Net profit for the first quarter came in at T$42.12 billion ($1.39 billion), versus the T$37.8 billion expected by analysts. The company is a big supplier to Apple and Nvidia, which means that a healthy outlook supports the overall tech sector.
Foxconn added that revenue jumped 24.2% to a record for the period but Chairman Young Liu said on an earnings call that the recent tariff uncertainty brings more challenges. Management guidance for the full year was more cautious than previous remarks.
The recent 90-day tariff halt between the US and China has the potential to support the coming year, but there is still some uncertainty due to recent swings in the Taiwanese dollar.
Liu said the recent deal would need a permanent solution and that means the remaining tariffs could still weigh on the global economy. The majority of Apple’s iPhones are assembled in China by Foxconn, but they are now building a new plant in Mexico in order to support the build of Nvidia servers.
Foxconn expects to see significant on-year growth in the second quarter, with high double-digit growth year-on-year for servers and an accelerating volume production ramp-up.
The company has been looking to expand its footprint in electric vehicles, which it also sees as a driver of future growth. Nvidia is also involved in the EV space and could provide additional business for Foxconn.
Foxtron Vehicle Technologies and Japan’s Mitsubishi signed a deal last week to work on an EV model together, after Foxconn had previously considered a stake in Nissan.
