&w=3840&q=100)
Foxconn sees robust AI demand as second-quarter profit tops forecast
The company said artificial intelligence server revenue is expected to leap more than 170% year-on-year in the coming quarter, though it also warned of uncertainty from U.S. tariffs.
Nvidia's biggest server maker and Apple's top iPhone assembler has been riding a data centre boom, as cloud computing firms such as Amazon, Microsoft and Alphabet's Google spend billions of dollars to expand their AI infrastructure and research capacity.
Cloud and networking products, which include servers, accounted for 41% of its revenue in the second quarter, while smart consumer products represented 35%, the company said.
The contribution from the server business to its revenue is set to grow further in the current quarter, as Foxconn expects a slight decline in smart consumer electronics revenue. Some experts expect iPhone sales to slow after they surged in the June quarter ahead of the expected imposition of U.S. tariffs.
"AI has been the primary growth driver so far this year," Kathy Yang, rotating CEO of Foxconn, said on a call with media and analysts. She warned however that "close attention is needed due to the impact of changes in tariffs and exchange rates".
The company said on Thursday its capital spending would rise more than 20% this year, as it plans to boost server production capacity in its manufacturing sites in Texas and Wisconsin.
Global trade uncertainty and particularly the trade spat between the U.S. and China could dim its outlook this year as it has a major manufacturing presence in China, though Washington and Beijing this week extended a tariff truce for another 90 days.
Most of the iPhones Foxconn makes for Apple are assembled in China, but the bulk of those sold in the U.S. are now produced in India. The company is also building factories in Mexico and Texas to make AI servers for Nvidia.
LORDSTOWN SOLD
Foxconn has also been looking to expand its footprint in electric vehicles, which the company sees as a major future growth generator, though that has not always gone smoothly.
Earlier this month, Foxconn said it had struck a deal to sell a former car factory at Lordstown, Ohio, for $375 million that it purchased in 2022 to manufacture EVs.
However, it will continue to occupy the facility. The company said the Ohio plant would be used to manufacture cloud-related products.
The goal of manufacturing its Model C EV for the U.S. market remains unchanged, although initial production will take place in Taiwan, Foxconn said.
A source familiar with the matter told Reuters that the plant was sold to its partner SoftBank. Foxconn and SoftBank declined to comment.
Overall, the company reported net profit for the April-June period of T$44.4 billion ($1.48 billion), higher than the consensus estimate of T$38.8 billion compiled by LSEG.
Foxconn, formally Hon Hai Precision Industry, last month reported record second-quarter revenue on strong demand for AI products, but cautioned over geopolitical and exchange rate headwinds.
Its shares have risen 8.4% so far this year, outperforming the broader Taiwan index's 5.2% gain. They closed up 0.5% on Thursday ahead of the earnings release.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
13 minutes ago
- Mint
Hedge funds shift bets to double down on Big Tech amid AI boom
By Anirban Sen and Carolina Mandl NEW YORK, Aug 14 (Reuters) - Wall Street's largest hedge funds, Bridgewater Associates, Tiger Global Management and Discovery Capital, increased their exposure to Big Tech in the second quarter amid a generational boom in the growth of artificial intelligence. During the June quarter, hedge funds cut their exposure to laggards in industries like aerospace and defense, and consumer and retail, as part of a broader move back to momentum investing. It marks a big shift from earlier this year when bets on Big Tech had soured for top money managers due to tariff-fueled volatility in financial markets, with investor concerns around rising inflation and fears of a bubble in AI triggering a sell-off in "Magnificent Seven" stocks. Since then, tech stocks have staged a big comeback. The S&P 500 is up 10% so far this year, buoyed largely by the largest tech companies, which account for nearly a third of the combined market cap of companies on the index. Outside technology, some hedge funds, such as Lone Pine and Discovery, also bet on UnitedHealth Group. Berkshire Hathaway and Michael Burry's Scion Asset Management also unveiled bets on the insurer, while Soros Fund Management boosted an existing position. Shares in UnitedHealth are down 46% this year, as the company faces rising costs, a U.S. Department of Justice probe, a cyberattack and the shooting of former top executive Brian Thompson last December. The fund's positions were revealed in quarterly securities filings known as 13Fs. While backward-looking, these filings typically reveal what funds owned on the last day of the quarter and are one of the few ways hedge funds and other institutional investors have to declare their positions. Below are the details of the changes in the holdings of the top hedge funds: Bridgewater Associates added more shares in Nvidia, Alphabet and Microsoft in the second quarter. The macro hedge fund founded by Ray Dalio more than doubled its bets in Nvidia. It ended June with 7.23 million shares in the chipmaker, or 154.5% more than it had at the end of March. Nvidia was Bridgewater's biggest bet in a single stock, totaling $1.14 billion. Its holdings in Alphabet and Microsoft went up by 84.1% and 111.9%, respectively, amounting to $987 million and $853 million. Other AI-related stocks added were Broadcom ( 102.7%), to 317.8 million shares, or $317 million, and Palo Alto Networks ( 117%), to 313.8 million, or $314 million. Discovery Capital, whose founder Rob Citrone has recently been bullish on Mexico's America Movil due to its exposure to Latin America, doubled its stake in the wireless provider during the second quarter. For the quarter ended June 30, the fund amassed another 2.65 million shares, valuing its current holding in America Movil at about $95 million. Citrone's hedge fund, which generated a 52% windfall on its investments last year, has increased its exposure to Latin America as part of a strategy to diversify from U.S. holdings. During the quarter, Discovery increased its holdings in Big Tech, as it more than doubled its stake in Meta Platforms , the parent company of Facebook, while also betting on booming demand for AI as it took a new position in Nvidia-backed cloud provider CoreWeave. The hedge fund also increased its position in UnitedHealth by 13%. Tiger Global Management bought more stocks in some Magnificent Seven companies in the second quarter, including Alphabet, Nvidia, Microsoft and Meta, its 13Fs showed. Chase Coleman's hedge fund added roughly 4 million shares of Amazon and ended June with roughly 10 million shares, worth $2.34 billion. The fund also increased its bets in smaller AI-players. It added over 800,000 shares in chip-making equipment supplier Lam Research Corp, ending June with 5.26 million shares, valued at $512 million. Many changes in Philippe Laffont's Coatue Management portfolio were also around AI-related stocks. It unveiled new positions in both Arm Holdings and Oracle, adding stakes worth roughly $750 million and $843 million, respectively. Both companies have boosted AI-related business initiatives. Coatue also increased its holdings in Nvidia-backed CoreWeave, adding 3.39 million shares in the second quarter, with its stake in the company worth $2.9 billion. Lone Pine Capital took a new position in UnitedHealth Group, buying up 1.69 million shares worth about $528 million during the June quarter. (Reporting by Carolina Mandl and Anirban Sen in New York; Editing by Leslie Adler)
Hindustan Times
an hour ago
- Hindustan Times
Kin of AI-171 crash ground victims hire US law firm
Families of 10 people killed on the ground in the Air India Flight AI-171 crash have hired Beasley Allen, the prominent US aviation law firm that secured billions from Boeing over the 737 MAX disasters, as the firm expands its representation of those affected by the tragedy in Ahmedabad on June 12. Kin of AI-171 crash ground victims hire US law firm The firm, led by aviation attorney D Michael Andrews, is exploring product liability claims against Boeing in US federal courts and Montreal Convention claims against Air India in UK courts, though no lawsuits have been filed yet. Andrews travelled to India in August to meet families across Gujarat and Mumbai, signing his 10th ground victim family on August 11. Among those killed was Maheshbhai Kalavadia, a Gujarati film producer from Naroda who had attended a meeting at Law Garden before calling his wife at 1:15 pm to say he was heading home. His remains were found 700 metres from the crash site and identified through DNA matching. 'These were innocent people who had nothing to do with the flight - they weren't even passengers,' said a relative who met Andrews. 'They were just going about their normal day when this tragedy struck.' The Boeing 737 MAX cases that established Beasley Allen's reputation involved crashes that killed 346 people between 2018 and 2019. Boeing ultimately paid $2.5 billion under a 2021 deferred prosecution agreement and settled more than 90% of claims, acknowledging liability for crashes caused by the faulty Maneuvering Characteristics Augmentation System (MCAS) it built into the jets. Andrews has taken on the case of victims killed in the medical college hostel where the plane crashed, including two people in the food preparation area and medical students in the mess hall, and also represents the family of a husband and wife killed while on a scooter for document verification. The firm is pursuing a water leak theory, focusing on the Boeing 787-8's electrical and equipment bay beneath the cockpit that houses flight computers including FADEC and TCMA systems capable of autonomous aircraft control. 'Above that and in those same areas, there are water lines and couplings that are known to have leaked on prior 787-8 aircraft,' Andrews explained, referencing Boeing service bulletins about coupling leaks that can allow water into computer equipment. The firm is filing Right to Information requests in India and Freedom of Information Act requests in the US to obtain complete flight data recorder information for independent expert analysis, Andrews told HT. Andrews met the sole survivor Ramesh and other families during his India visit, saying conversations were brief and private. He plans to file cases separately for each victim but has no fixed timetable pending data collection.
Mint
2 hours ago
- Mint
Intel stock soars 7% as Trump government mulls taking stake; check details of potential deal
Intel's stock surged over 7% on Thursday (August 14), following a Bloomberg report that the Trump administration is in talks to acquire a stake in the chipmaker. This potential deal could mark a significant step in bolstering the US semiconductor manufacturing, aligning with President Donald Trump's push for domestic high-tech production. Intel is the only US company capable of producing cutting-edge chips domestically, a critical asset in the global race for semiconductor supremacy. Rivals like Taiwan Semiconductor Manufacturing Company and Samsung have US factories, but Intel's unique position makes it a focal point for national security and economic strategies. The proposed government stake aims to fund Intel's ambitious Ohio factory hub, initially announced in 2022 with a $20 billion investment, potentially scaling to $100 billion. This complex, intended to be the world's largest chip manufacturing facility, has faced delays, with production now pushed into the 2030s. The deal stems from a recent meeting between Intel CEO Lip-Bu Tan and President Trump on August 11, 2025. Despite earlier tensions, Trump had called for Tan's resignation over alleged ties to Chinese firms; the discussions appear to have shifted toward collaboration. Intel emphasized its commitment, stating, 'We are deeply committed to supporting President Trump's efforts to strengthen U.S. technology and manufacturing leadership.' Intel has faced significant challenges, losing 60% of its stock value in 2024. Despite a 19% recovery in 2025, the company struggles to compete in the artificial intelligence chip market, where Nvidia and AMD dominate. Intel's foundry business, which manufactures chips for other companies, has yet to secure a major customer, a critical step for expansion. The government's investment could provide the financial boost needed to stabilize Intel's operations and accelerate its Ohio project, enhancing its competitiveness. The potential stake reflects a growing trend of the US government's involvement in strategic industries. Recent moves include a 15% stake of Nvidia and AMD chip sales to China, a $400 million equity stake in MP Materials, and a 'golden share' in the US Steel to facilitate its acquisition by Nippon Steel. The deal could strengthen Intel's financial position and signal confidence to investors and potential foundry clients.
