Foxconn Boosts Q3 Outlook on Surging AI Server Demand

Foxconn, the world's largest contract electronics manufacturer, announced its third-quarter performance is poised to outperform market expectations, driven by sustained, strong demand for artificial intelligence hardware.

Upgraded Forecast

In a statement, the Taiwanese company said its visibility for the third quarter has improved, with overall performance now expected to be better than previously forecast. Foxconn, a major supplier to Apple Inc. and the largest server manufacturer for Nvidia, attributed the momentum to growing AI demand coinciding with the peak season for information and communication technology (ICT) products.

"In the third quarter, as AI demand continues to grow, and ICT products also enter the peak season of the second half of the year, operations are expected to gradually gain momentum," the company stated. Foxconn, formally known as Hon Hai Precision Industry, does not provide specific numerical forecasts.

Record Revenue Performance

The optimistic outlook is supported by robust recent sales figures. Foxconn reported that its revenue for August surged 51.98% year-over-year to T$921.8 billion ($29.15 billion).

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Key takeaways from the revenue report include:

• The figure represents the highest revenue ever recorded by the company for the month of August.
• It was the second consecutive month that revenue surpassed T$900 billion.

Market Context

Foxconn has been a significant beneficiary of the global boom in AI infrastructure. The upgraded guidance follows a strong second quarter, where the company reported a 35% rise in profit that also beat analyst estimates. Despite the positive outlook, Foxconn cautioned that it is necessary to "monitor the impact of the volatile global political and economic situation," without providing further detail.

Ahead of the announcement, Foxconn's shares closed up 3.4% on Friday, outperforming the broader Taiwanese market's 1.5% gain.