AI Demand Drives Foxconn Revenue Spike Despite Profit Decline

AI Server Demand Drives Strong Revenue Growth

Foxconn reported a sharp rise in first-quarter revenue, climbing 29.7% year-on-year to T2.13 trillion ($66.6 billion). The surge was powered by strong demand in its cloud and networking division, which supplies infrastructure to AI chipmakers such as Nvidia.

Growth was also supported by the smart consumer electronics segment, including iPhone production, which expanded following recent product launches. March delivered the strongest monthly performance, with revenue jumping 45.6% year-on-year to T803.7 billion, reflecting accelerating demand for AI servers and consumer devices.

Profit Decline Highlights Margin Pressure

Despite strong revenue gains, net profit fell 2.4% year-on-year to $1.42 billion, weighed down by 5.88% gross margins and rising operating costs. This divergence between revenue growth and profit decline reflects mounting cost pressures across manufacturing and supply chains.

Geopolitical Risks and 2026 Outlook

Chairman Young Liu identified the Middle East war as the company’s top external risk, warning that logistics disruptions remain possible. Still, Foxconn forecasts “strong growth” in 2026, driven by continued expansion in AI infrastructure demand, despite the company’s stock declining 16% this year.

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