Hon Hai stock: Record profit strengthens AI growth outlook

Hon Hai Technology Group, better known as Foxconn, reported record third-quarter results on Thursday, November 12, as demand for AI servers lifted revenue and profitability. In its financial release, the company said all four major product segments had a stronger outlook for the full year.

Hon Hai stock traded at 12.80 euros on Lang & Schwarz at 09:35 CET on Friday, November 13. The quote reflects the company’s U.S. dollar-denominated security traded in euros on that venue.

AI servers lead quarterly expansion

Foxconn generated revenue of NT$3.02 trillion in the July-to-September quarter, up 46 percent from the same period a year earlier and 19 percent from the second quarter. Gross profit rose 39 percent to NT$181.5 billion, operating profit increased 64 percent to NT$115.4 billion, and net profit attributable to owners of the parent company climbed 34 percent to NT$77.5 billion.

Earnings per share reached NT$5.51, compared with NT$4.15 a year earlier and NT$4.27 in the second quarter. The company reported a gross margin of 6.02 percent, an operating margin of 3.83 percent and a net margin of 2.57 percent. For the first nine months, revenue increased 39 percent to NT$7.66 trillion and net profit rose 30 percent to NT$187.4 billion.

Cloud and networking products, including AI servers, were the main source of the record revenue. Foxconn said the segment exceeded its most optimistic initial expectations, while Chairman Young Liu described AI servers as the group’s most important growth engine. The division accounted for 54 percent of third-quarter revenue, up from 51 percent in the second quarter.

Fourth-quarter outlook moves higher

Foxconn expects strong sequential and year-over-year growth in the fourth quarter. A new generation of AI server racks should support further growth in cloud and networking products, while the traditional peak season is expected to lift smart consumer electronics shipments. The company also cited higher average selling prices in consumer electronics.

Management raised its outlook across all four major product segments after operational performance exceeded earlier expectations. Computing products remain constrained by tight memory supplies and may decline slightly from the second quarter, although higher component prices are expected to support significant year-over-year growth.

Supply constraints remain a risk

Liu said Foxconn was optimistic about continued operational growth in 2027, supported by customer demand and further investment in AI infrastructure. He also warned that chips, memory and other key components remain in tight supply. New production capacity should ease the bottlenecks gradually, but demand is still expected to exceed supply next year.

The company said AI growth is improving capital efficiency as well as revenue. Return on equity reached 10.44 percent in the first nine months, while operating profit increased 65 percent year over year. For investors, the results strengthen the AI-server growth case, but execution depends on component availability, capital spending by cloud customers and the pace at which Foxconn expands production.

U.S. equities and technology shares remain the broader market context for AI infrastructure suppliers; see current market reports.

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