Foxconn, the world’s largest contract electronics manufacturer, reported a 35 percent rise in second-quarter profit, beating market expectations as strong AI infrastructure demand boosted revenue and its cloud business.
According to Hon Hai Precision Industry’s second-quarter 2026 financial results report, net profit attributable to shareholders rose 35 percent to NT$59.97 billion ($1.86 billion) from NT$44.36 billion a year earlier.
Revenue climbed 41 percent year over year to NT$2.526 trillion, while operating income jumped 68 percent to NT$94.8 billion, signaling that earnings growth outpaced the expansion in sales. Gross profit also increased 36 percent to NT$154.5 billion, while earnings per share advanced 34 percent to NT$4.27.
AI infrastructure becomes Foxconn’s growth engine
The biggest shift came from Foxconn’s cloud and networking products, which accounted for 51 percent of second-quarter revenue, making the segment the company’s largest business during the period.
The figures underline how quickly Foxconn’s business mix is moving toward AI servers and related infrastructure. The company explicitly identified AI infrastructure as a key driver of revenue growth, with demand supporting both higher volumes and broader expansion across its server-related operations.
Operating margin improved to 3.75 percent from 3.16 percent a year earlier, even as gross margin edged down to 6.12 percent from 6.33%, suggesting operating leverage from scale helped offset some margin pressure.
AI servers anchor Foxconn’s next expansion phase
Foxconn expects AI server demand to remain strong through the rest of 2026, forecasting high-double-digit sequential growth in AI rack shipments in the third quarter, alongside a quarter-over-quarter increase in AI server revenue.
For the full year, the company expects AI rack shipments to more than double, while a broader range of AI solutions is expected to help it gain market share.
Beyond servers, Foxconn is widening its exposure across the AI infrastructure chain, including components, liquid cooling, modular data centers and broader data-center systems.
Its longer-term “3+3+3” strategy also links artificial intelligence with semiconductors and next-generation communications, alongside smart manufacturing, electric vehicles and smart-city platforms, giving the company multiple avenues to extend AI-driven growth beyond its core server business.
Stock tests NT$270 as recovery rally gathers pace
Foxconn shares closed around NT$269.5, or roughly $8.37, after a strong August rebound extended the stock’s recovery from late-July lows near NT$228.
The chart shows a clear sequence of higher lows and higher highs, with the stock reclaiming the NT$250 and NT$260 zones before pushing toward NT$270, now the key near-term resistance area.
A sustained break above NT$270 could open the door toward the NT$275 region, while NT$263–NT$265 has emerged as the closest support.
The stock rose 2.7 percent on Aug. 12 ahead of the earnings release, meaning the move reflects pre-results positioning rather than a direct reaction to the profit growth.
