Taiwanese electronics giant Foxconn, the world’s largest contract manufacturer, has forecast robust revenue growth for the first quarter of 2025 despite a recent profit miss. The company attributes this optimism to strong demand from its tech clients, particularly for artificial intelligence (AI) servers, which are expected to account for over half of its total server revenue this year. Foxconn Chairman Young Liu emphasized that demand from cloud service providers (CSPs) remains strong, countering market rumors of a potential slowdown. This upbeat outlook contrasts with the cautious sentiment prevailing across other industries amid global economic uncertainties.

Foxconn’s Q4 2024 net profit stood at T$46.33 billion ($1.41 billion), marking a 13% decline from the previous year and falling short of analysts’ expectations of T$54.4 billion. The profit drop was largely attributed to losses in non-operating segments, though the company did not disclose specific details. Despite this setback, Foxconn remains bullish about its future prospects, driven by its strategic focus on AI server production. The company is also expanding its collaboration with Nvidia, a key player in AI hardware, to capitalize on the growing demand for advanced computing solutions.

In the January-March 2024 period, Foxconn reported a 72% year-over-year increase in net profit, reaching T$22.01 billion ($679 million). This growth was fueled by a recovery from the low base set in the previous year and surging demand for AI servers. However, the profit figure fell short of analysts’ projections of T$29.31 billion. Consumer electronics, including smartphones, contributed 48% of the company’s revenue during this period, while cloud and networking products accounted for 28%. Foxconn has expressed confidence in maintaining stable revenue from smart computer electronics in upcoming quarters.

The company’s renewed focus on AI-driven technologies reflects its commitment to diversifying beyond traditional consumer electronics manufacturing. Foxconn has also reaffirmed its support for Sharp Corp., a Japanese electronics maker in which it holds a significant stake. Chairman Liu announced plans to transform Sharp’s Sakai factory into an AI data center, signaling Foxconn’s long-term vision for leveraging AI advancements. With its strategic shift and strong client relationships with major tech firms like Apple and Nvidia, Foxconn is poised to navigate challenges and sustain growth in an increasingly competitive market.