Foxconn reports strong Q3 profit driven by AI server boom, teases OpenAI announcement

Taiwanese technology giant Foxconn, formally known as Hon Hai Precision Industry, on Wednesday reported a forecast-beating 17% rise in third quarter net profit. The significant growth was largely attributed to surging global investment in artificial intelligence (AI) and the resulting expansion of the company’s crucial server business.

Net profit for the July-September period reached NT$57.67 billion (approximately $1.9 billion).

Foxconn, the world's biggest contract electronics manufacturer and Apple’s top iPhone assembler, has been successfully executing a strategic pivot. The company’s focus has shifted from the low-margin assembly of consumer devices towards manufacturing high-specification AI servers for major clients, including Nvidia and cloud computing firms such as Amazon, Microsoft, and Alphabet's Google. This shift proved pivotal, as revenue from its cloud and networking business—which encompasses the AI servers—exceeded that of its smart consumer electronics division for the second consecutive quarter.

Looking ahead, Foxconn Chairman Young Liu offered a bullish outlook, stating during an earnings call that the importance of AI would increase massively in 2026 and would be a major driver of growth. However, he added that the company would remain cautious regarding potential geopolitical and currency issues.

"Generally speaking, judging from what we see now, I am very optimistic about the AI market next year," Liu said, adding that “the development of AI is still just beginning”.

Liu also said that the company aims "to become the most comprehensive AI server hardware supplier".

Fourth quarter forecast

In terms of near-term guidance, the firm anticipates significant year-on-year revenue growth in the fourth quarter, with AI server revenue specifically forecast to increase quarter on quarter. The company also expects significant annual revenue growth overall, in line with its guidance provided in August.

Adding to the anticipation, Liu also teased a major announcement related to the ChatGPT creator OpenAI, which is set to take place at Foxconn’s annual tech day in Taipei next week.

Electric Vehicles

Beyond AI, the company is actively seeking to expand its footprint in the electric vehicle (EV) sector as a key future growth generator. Nevertheless, this diversification has encountered challenges, including the sale of a former car factory in Lordstown, Ohio—which Foxconn purchased in 2022 — for $375 million in August.

In the broader market context, companies announcing multi-billion-dollar investments in artificial intelligence have raised concerns about the formation of a market bubble.

Foxconn stock closed up 1.8% on Wednesday ahead of the earnings release. So far this year, the stock has surged 36%.