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Apple supplier Foxconn anticipates a substantial revenue increase in 2024 after a slow start to the year due to surging demand for AI servers. The company's fourth-quarter profit surpassed market expectations, setting a promising tone for the year ahead.
Firm Performance and Growth Factors
Yahoo reported that Foxconn's October-December net profit surged 33% to T$53.14 billion, driven by robust demand for AI servers and successful sales during the year-end holiday season. The profit exceeded the T$43.52 billion LSEG SmartEstimate, emphasizing the company's resilience and market strength.
In the fourth quarter, consumer electronics accounted for 58% of Foxconn's revenue, with cloud and networking products contributing 20%. While the first quarter may see a slight revenue decline, Foxconn remains optimistic about the overall revenue trajectory for 2024.
Apple's Influence and Market Dynamics
Reuters noted that as a key supplier to Apple, Foxconn's revenue forecasts are intertwined with Apple's sales performance. Despite challenges in the Chinese market, Apple's recent sales success has positively impacted Foxconn's outlook for the upcoming quarters.
The demand for Apple products, particularly the iPhone, directly impacts Foxconn's manufacturing operations. With upcoming Apple product launches, there is an anticipatory surge in production demand, which is expected to bolster Foxconn's financial performance further.
Additionally, the technology sector's shifting focus towards AI and machine learning underscores the importance of AI servers, positioning Foxconn favorably in the market due to its early investments in this area. This strategic foresight is anticipated to contribute significantly to the company's revenue growth in 2024.
Market Performance and Industry Insights
Foxconn's market performance reflects the industry trend of a quieter first quarter compared to the preceding period. However, the company's strategic outlook positions it for significant revenue growth year-on-year, indicating a positive trajectory for future quarters.
Foxconn's shares closed up 0.4% before the earnings release, showcasing investor confidence in the company's growth prospects. The positive market response reflects the industry's anticipation of Foxconn's future revenue surge.
Photo: Foxconn Press Center
