Foxconn’s Q4 Profit Rises on AI Demand Amid Trade War Concerns

Foxconn (SS:601138), the world’s largest contract electronics manufacturer and key supplier for Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA), is expected to report a 2.35% rise in fourth-quarter profit, driven by strong demand for artificial intelligence (AI) servers. Analysts estimate Foxconn’s net profit for October-December reached T$54.4 billion ($1.65 billion), up from T$53.15 billion a year ago, according to an LSEG consensus.

In January, the company, officially known as Hon Hai Precision Industry (TW:2317), reported a record-breaking 15.2% year-over-year increase in fourth-quarter revenue, fueled by robust AI server sales. Foxconn anticipates strong first-quarter growth, exceeding the average performance of the past five years, though it has not provided specific numerical guidance.

However, escalating trade tensions pose challenges. With significant manufacturing operations in China and Mexico, Foxconn faces increased import tariffs under U.S. President Donald Trump’s trade policies, potentially impacting future earnings. The company's stock has already dropped 8.7% this year amid tariff concerns.

Despite these challenges, Apple recently announced plans to collaborate with Foxconn on a 250,000-square-foot (23,200-square-meter) server assembly facility in Houston to power Apple Intelligence data centers. This move underscores Foxconn’s strategic role in the expanding AI and cloud computing market.

Foxconn will hold its earnings call at 3 p.m. Taipei time (0700 GMT) on Friday, providing further insight into its 2024 outlook. Investors and analysts will closely watch for updates on how trade policies and AI-driven demand will shape the company's growth in the coming months.