Foxconn, the world’s largest contract electronics manufacturer and a key partner to Nvidia, reported a sharp rise in revenue in the final quarter of 2025, underscoring the continued momentum behind global investment in artificial intelligence infrastructure.
Also known as Hon Hai Precision Industry Co., the Taiwanese group said quarterly revenue rose 22% year on year to NT$2.6 trillion ($83 billion) in the three months to December.
The figure exceeded analyst expectations of around NT$2.4 trillion, according to LSEG estimates, reflecting strong demand across its components and cloud-related businesses.
The results come as major technology companies continue to accelerate spending on data centers and AI hardware, positioning Foxconn as a central beneficiary of the ongoing buildout.
AI infrastructure drives revenue growth
Foxconn plays a critical role in the AI supply chain, manufacturing the servers that house high-performance chips used in data centers.
It is a major server assembly partner for Nvidia, whose graphics processing units are widely used to train and deploy AI models.
Nvidia has recently reiterated confidence in sustained AI demand, forecasting about $65 billion in sales for the January quarter, above analyst expectations.
Its optimism has reinforced broader expectations that spending on AI infrastructure will remain robust in the near term.
Foxconn said revenue growth in the fourth quarter exceeded its own expectations, creating a “high base” heading into the first quarter of 2026.
Despite entering what it described as the traditional off-season for information and communications technology products, the company said it expects earnings to be near the upper end of its five-year historical range, supported by rising shipments of AI server racks.
The company’s share price rose about 25% in 2025, following a 76% gain the previous year, reflecting growing investor confidence in its AI-related expansion.
Expanding capacity and strategic partnerships
To meet rising demand, Foxconn is expanding production capacity outside Asia.
The company is adding AI server manufacturing in the United States, including facilities in Wisconsin and Texas, where it already operates established campuses.
Foxconn has also deepened its involvement in the AI ecosystem through a series of partnerships.
In November, it signed an agreement with OpenAI to collaborate on designs for next-generation AI infrastructure hardware.
In May, Foxconn announced a partnership with Nvidia and the Taiwanese government to help provide infrastructure for a major AI factory in Taiwan.
In July, the company said it was taking a stake in TECO Electric & Machinery Co., a data center construction firm, further strengthening its exposure to the physical infrastructure underpinning AI deployment.
Hon Hai’s chairman has dismissed concerns about overinvestment in AI, saying worries about circular financing would not alter the company’s strategic focus.
AI optimism tempered by investor concerns
While Foxconn’s results highlight strong demand, broader concerns persist over whether massive capital outlays on AI will generate sufficient near-term returns.
Investors have questioned the pace at which profits will materialize from the hundreds of billions of dollars being committed by major technology firms.
Capital expenditures by Microsoft, Alphabet, Amazon, and Meta Platforms are expected to rise about 34% to a combined $440 billion over the next year, according to Bloomberg data.
Some market participants have also raised concerns about the circular nature of investment flows among leading AI firms.
Beyond AI, Foxconn continues to derive a significant portion of revenue from assembling Apple’s iPhone.
The latest iPhone models introduced in September have performed strongly in the US and China, contributing to double-digit year-on-year sales growth in both markets, according to Counterpoint.
Together, robust AI demand and resilient consumer electronics sales have positioned Foxconn to take advantage of two of the technology sector’s most important growth drivers.
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