Foxconn's $1.5B Windfall: How AI is Powering an Unstoppable Profit Boom
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Foxconn (FXCOF) just dropped a bombshell for investors, reporting a Q3 net profit of $1.5 billiona 14% surge year-on-yearwhile revenue skyrocketed 20% to hit a record $57 billion. The world's largest contract electronics maker isn't just riding the AI waveit's building the boat. Chairman Young Liu dubbed 2025 the year of AI, predicting that AI servers will generate over half of its server revenue next year, up from 40% today. Foxconn's aggressive investments in AI tech, including constructing the world's largest Nvidia GB200 superchip factory in Mexico, position it as a critical player for U.S. AI giants like Nvidia and Amazon. Liu emphasized, We won't just be an AI supplier but also an AI user.
Foxconn's AI-server sales exploded over 200% in 2024, turning its cloud and networking business into a cash cow contributing 32% of total revenue. While consumer electronicsa.k.a. iPhonesstagnated, AI is keeping the lights on and then some. Liu hinted at a 40% global AI-server market share in the cards, while demand for Nvidia's cutting-edge GB200 servers was described as insane. Foxconn isn't just sitting around waiting for trade tensions or economic slowdowns to play out, either. It's doubling down on diversification, spreading its bets with facilities in India, Vietnam, and the U.S., including its fast-growing Wisconsin and Texas plants. All this, despite looming tariff threats from U.S. President-elect Donald Trump, who's signaling tougher policies on China.
Even with its sights set on AI, Foxconn is still juggling other plates. Its electric vehicle ambitions have hit a speed bump, with the company quietly walking back its 2025 market share target. But let's not lose the plot here: Foxconn's AI push has lit up its stock price, which has doubled in 2024. Investors are clearly buying into its transformation story. As Liu boldly stated, This is another growth phase. Translation? Foxconn is gearing up to dominate AI's next frontier, leveraging supercomputing power to cement itself as a long-term winner in the tech revolution.
This article first appeared on GuruFocus.