Foxconn Reports 13% Quarterly Profit Drop, But AI Hype Will Fix It

The world’s largest contract electronics manufacturer Foxconn is optimistic about 2025, forecasting strong revenue growth in the first quarter despite an unexpected 13% decline in profit in the fourth quarter of 2024 due to the difficult situation related to trade wars.

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Foxconn, which makes Apple’s iPhones and Nvidia’s artificial intelligence (AI) servers, among other electronics, reported a 13 percent drop in October-December net profit to NT$46.33 billion ($1.41 billion). However, that was below the NT$54.4 billion ($1.64 billion) median forecast of 15 leading analysts surveyed by LSEG, Reuters reported.

This is Foxconn’s first profit decline since the second quarter of 2023, when the company posted a 0.9% decline. Foxconn did not provide further comment on the matter, but will provide earnings information in an upcoming report later today.

Foxconn’s outlook is complicated by global trade tensions. The company has large manufacturing operations in China and Mexico, two of the United States’ largest trading partners. But increased tariffs from President Donald Trump’s administration could hurt business.

Despite the challenges, Apple last month announced a partnership with Foxconn to build a 255,000-square-foot factory in Houston, Texas, to build servers for data centers that support Apple Intelligence. But Foxconn shares have already fallen 8.7 percent this year, amid investor concerns about the impact of U.S. tariffs and trade policy.

At the same time, strong demand for AI servers should offset sluggish iPhone sales this year, Bloomberg Intelligence analyst Steven Tseng said. “We expect cloud hardware to account for more than 40% of Foxconn’s revenue this year, up from 30% in 2024, while smart consumer electronics, which largely consists of iPhone sales, will fall to less than 40% from 46% in 2024,” he said.