Key Takeaways:
- Foxconn Q2 revenue hit T$2.513 trillion, beating estimates by 5.9%
- AI server demand drove 39.8% YoY growth, the fastest pace in recent quarters
- Company expects 30% capex growth in 2026 to expand manufacturing capacity
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Foxconn Q2 revenue jumps 39.8% as AI server demand surges
Foxconn posted Q2 revenue of T$2.513 trillion, up 39.8% from a year earlier, driven by surging AI server demand.
The result topped the LSEG SmartEstimate of T$2.372 trillion, reflecting stronger-than-expected shipments of AI infrastructure to Nvidia and other cloud customers. Foxconn, formally known as Hon Hai Precision Industry Co., is Nvidia's biggest server maker and holds about 40% of the global AI server market.
"AI servers accounted for more than half of our total server revenue in the first quarter, and that momentum continued into the second quarter," CEO Michael Chiang said at an investor conference in May, when the company also projected 30% capital expenditure growth for 2026.
The company's cloud and networking division contributed 48% of first-quarter sales of T$2.12 trillion. First-quarter net profit reached NT$49.92 billion ($1.58 billion), up 19% year on year. Operating margin stood at 3.57% in the first quarter, with Chiang forecasting full-year 2026 operating margin above the 3.2% recorded in 2025.
Foxconn is investing in AI server components including liquid cooling and high-speed transmission solutions. Shipments of co-packaged optics switches are expected to begin in the third quarter, with volumes likely reaching 10,000 units this year. The company has also partnered with cloud service providers to develop ASIC-powered AI server racks and expanded sovereign AI initiatives in Africa through collaborations with infrastructure firm Amin and French state-owned Bull.
The US and Mexico remain Foxconn's primary AI server production hubs, Chiang said, as North American demand stays strong.
The revenue beat shows the AI infrastructure buildout continues to accelerate, benefiting the entire supply chain from chip designers to server assemblers. Investors will watch Foxconn's third-quarter revenue trajectory and any updated guidance on AI server margins when the company reports next in October.
This article is for informational purposes only and does not constitute investment advice.
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