Foxconn’s Q1 profit will rise from a low base as growth is powered by AI

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Foxconn's Q1 profit will rise from a low base as growth is powered by AI
Foxconn's Q1 profit will rise from a low base as growth is powered by AI

The world’s largest contract electronics manufacturer, Foxconn, of Taiwan, is expected to report on Tuesday that its first-quarter profit more than quadrupled due to robust demand for artificial intelligence servers, after rebounding from a low base a year ago.

After recovering from a low foundation a year ago, Taiwan’s Foxconn (2317.TW), the world’s largest contract electronics maker, is set to report on Tuesday that first-quarter profit more than quadrupled due to strong demand for artificial intelligence servers.

The company said last month that first-quarter revenue decreased 10% from the same period last year, but it remained optimistic about 2024.

An LSEG consensus estimate of 15 analysts states that Apple’s (AAPL.O) net profit for the January–March period likely came in at T$29.3 billion ($904.6 million), as the company opened a new tab-top iPhone assembler.

That would be a 129% rise over the same time last year, when earnings declined as a result of the company’s T$17.3 billion write-down of its 34% ownership in Japanese electronics manufacturer Sharp Corp. (6753.T). Additionally, it would be the third straight quarter of earnings growth.

It’s clear that Foxconn is working hard to improve its AI servers. Dell and HP are among the targeted clients, according to Mega International Investment Service vice president Allen Huang.

In a client note, analysts at KGI Securities predicted that Foxconn’s sales for the year would peak in the first quarter, despite the continued high demand for AI cloud servers.

“We anticipate that cloud sales will continue to be the primary sales driver in 2025 and an earnings growth driver,” they added.

Sales in April reached a record high, highlighting Foxconn’s optimistic outlook. The business, formerly known as Hon Hai Precision Industry, has stated that it anticipates growing revenue in the second quarter of the year. Foxconn doesn’t offer quantitative advice.

Thanks to its optimistic view on AI, Foxconn’s shares have increased by more than 60% in 2024 thus far, far exceeding the growth of the overall market (.TWII), opening a new tab of 15%.

This month, Apple outperformed modest forecasts for its quarterly results and outlook, and CEO Tim Cook predicted that revenue growth would resume in the current quarter.

On Tuesday, May 14, at 3 p.m. in Taipei (0700 GMT), Foxconn will host its results call.

Also readUnveiling the Ethical Imperatives: Navigating the Intersection of AI and Cybersecurity

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