Apple Supplier Foxconn Sees AI Server Demand Lifting Q4 Growth

This article first appeared on GuruFocus.

Foxconn, the world's largest contract electronics manufacturer and Apple's (NASDAQ:AAPL) top iPhone assembler, reported record September and third-quarter revenue on Sunday but still fell just shy of market expectations.

The Taiwan-based giant said September revenue rose 38% month-over-month and 14.2% year-over-year to NT$837.07 billion ($27.54 billion). For the third quarter, revenue increased 14.5% sequentially and 11% from a year ago to NT$2.06 trillion ($67.78 billion), slightly below the NT$2.09 trillion analysts had expected, according to S&P Capital IQ.

Is AAPL fairly valued? Test your thesis with our free DCF calculator.

Foxconn's key businesses continue to move in different directions. Its smart consumer electronics division which includes iPhones slipped slightly year-over-year, with the company citing exchange-rate effects. Meanwhile, its cloud and networking products segment, which makes artificial intelligence servers for clients such as Nvidia (NASDAQ:NVDA), delivered strong growth as demand for AI infrastructure continues to accelerate.

Looking ahead, Foxconn said it expects continued sequential growth in Q4, helped by rising AI server shipments and the seasonal uptick in information and communications technology products. The company also warned, however, that global political and currency risks could still weigh on results.

View Comments