Foxconn Profit Misses Estimates Despite AI Server Growth

This figure significantly missed analyst expectations of NT$60.88 billion, according to FactSet. The profit contraction occurred despite a robust 22% year-over-year revenue increase, totaling NT$2.606 trillion, driven by strong demand for its artificial intelligence (AI) servers.

Foxconn, once primarily known for iPhone assembly, has become a critical supplier of AI servers for major tech players like Nvidia and Amazon, with its cloud and networking products (including AI servers) now accounting for 42% of total revenue. This segment has surpassed smart consumer electronics as the company's largest revenue driver since Q2 2025.

The primary factors weighing on the bottom line were a substantially higher tax expense and a decline in gross profit margin, which fell to 5.88% from 6.15% in the prior year. This indicates that while Foxconn is successfully capitalizing on the AI boom's top-line growth, profitability is being challenged by rising costs or tax burdens, raising questions about margin sustainability in this high-growth sector.