Taiwan’s Foxconn is riding the AI server boom to record profits, with first-quarter earnings expected to surge 72% year-over-year to $1.25 billion. As Apple’s largest iPhone assembler and a key Nvidia AI server manufacturer, the company’s strategic positioning in the AI hardware supply chain is paying dividends despite global trade uncertainties. The contrast between Foxconn’s strong financial performance and its declining stock price highlights how geopolitical tensions between the US and China are creating volatility even for companies benefiting from the AI revolution.
The big picture: Foxconn is expected to report a 72% profit jump for Q1 2025, reaching T$37.8 billion ($1.25 billion) when it releases earnings on Wednesday, according to analyst consensus estimates.
- Last month, the company already disclosed record first-quarter revenue that increased 24.2% year-over-year, driven primarily by strong AI server sales.
- The electronics manufacturing giant serves as both Apple’s main iPhone assembler and a crucial manufacturer of Nvidia’s AI servers, positioning it at the intersection of consumer technology and the AI computing boom.
Behind the numbers: Despite record quarterly performance, Foxconn’s shares have declined 14% year-to-date, significantly underperforming Taiwan’s broader market index, which is only down 7%.
- This stock performance disconnect reflects investor concerns about US trade policies and potential tariffs affecting Foxconn’s extensive manufacturing operations in China and Mexico.
- A temporary reprieve came Monday when Washington and Beijing agreed to suspend steep tariffs for at least 90 days, though long-term trade uncertainty remains.
Diversification strategy: Foxconn is pursuing expansion beyond electronics manufacturing into electric vehicles as a future growth engine.
- The company’s subsidiary, Foxtron Vehicle Technologies, recently signed a memorandum of understanding with Mitsubishi Motors for electric vehicle production.
- Foxconn has also expressed interest in potentially acquiring a stake in Nissan, which is working to restructure its operations after weak performance in China and the United States.
What to watch: Foxconn’s earnings call on Wednesday afternoon will provide updated guidance for 2025, with particular focus on how the company views ongoing global trade tensions.
- While the company has already indicated it expects year-over-year growth in Q2, executives have cautioned about the need to closely monitor “evolving global political and economic conditions.”
- Foxconn’s new manufacturing facility in Mexico, which will produce AI servers for Nvidia, could face challenges if US tariff policies targeting Mexico are implemented.
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