Nvidia Supplier Foxconn Posts 17% Profit Jump on AI Server Demand

This article first appeared on GuruFocus.

Nvidia’s primary manufacturing partner Foxconn (HNHPF, Financials) reported a strong gain in third-quarter profit due to rising demand for AI servers, which is transforming the company.The Taiwanese electronics firm, which assembles Apple’s iPhones, reported JulySeptember net profit of NT$57.67 billion, up 17% from a year earlier and ahead of analyst projections. Revenue was NT$2.06 trillion, as expected.Foxconn’s cloud and networking division, which makes Nvidia-compatible server racks, contributed to that strength. AI sales have surpassed consumer electronics sales and should expand throughout next year, the company said.AI is changing global manufacturing and data infrastructure, and Foxconn chairman Young Liu urged investors, following the money. He said the corporation is investing aggressively to meet demand but is concerned about currency swings and political threats that could damage global supply chains.Foxconn is expanding AI and automation relationships. It is working with Mitsubishi Electric on energy-efficient AI data centers and Nvidia, Stellantis, and Uber on self-driving vehicle systems.Foxconn’s shares are up more than 30% this year, indicating that it is rapidly becoming one of the most important suppliers in the AI hardware ecosystem. This move could define its next phase of growth.