For the first time, the world's largest contract electronics maker has issued a full-year revenue outlook, and the message is unambiguous: the AI infrastructure boom has years to run.
Bury the profit miss. The more consequential number out of Foxconn on Monday is the one the company has never before been willing to put in writing: a full-year revenue forecast for 2026, rated "strong growth," its highest possible designation. For a company that assembles Nvidia's AI servers and Apple's iPhones, that signal matters more than a modest quarterly earnings shortfall.
Net profit for the October-to-December quarter came in at $1.42 billion, a 2% decline on the year and below analyst expectations of around $1.99 billion. Revenue, by contrast, hit a record $83 billion for the quarter, up 22% year on year. The gap between those two figures tells you everything about Foxconn's current situation: the AI server business is enormous, growing fast, and not yet reliably profitable at the bottom line.
Gross margins thinned slightly, to 5.88% from 6.15% a year earlier, weighed down by a higher tax bill and cooling consumer electronics demand. A brewing memory chip shortage, tied to AI's voracious appetite for components, is expected to keep pressure on the device side of the business through this year.
Why the full-year call is the real story
Foxconn does not do numeric guidance. Its scale runs from "significant growth" down, and "strong growth," the top rating, is what it has assigned to both the first quarter and the entirety of 2026. The company has been willing to offer that kind of forward visibility for individual quarters before, but committing to it for a full calendar year is new, and it reflects a level of confidence in AI server demand that the company has not publicly expressed before now.
The driver is straightforward: cloud service providers are not slowing their data centre spending, and Foxconn sits squarely in the path of that capital. The company is Nvidia's biggest server assembler and is building dedicated AI server facilities in both Mexico and Texas to keep pace with demand. AI servers are already expected to account for more than half of the company's total server revenue, and analysts have put Foxconn's likely AI server market share above 40% in 2026.
In November, the company struck a partnership with OpenAI on next-generation AI infrastructure hardware. Foxconn and Nvidia are also tied to an AI factory initiative with the Taiwanese government. The infrastructure buildout, in other words, is not a side project. It is the core of what Foxconn is becoming.
The iPhone business is moving too
Smart consumer electronics, the segment that includes iPhone assembly, is forecast to see significant year-on-year revenue growth in the first quarter. That is a more positive signal than recent quarters, which were hampered by unfavourable exchange rates and soft global device demand.
The geography of iPhone production continues to shift. Most handsets destined for the US market are now assembled in India rather than China, a change that has been accelerating as US-China trade tensions persist. Apple and Foxconn are also building a server assembly facility in Houston to support Apple Intelligence infrastructure.
The EV detour and the tariff question
Not everything has gone to plan. Foxconn bought a car factory in Lordstown, Ohio in 2022 with ambitions to become a serious electric vehicle manufacturer, then sold it back in August for $375 million. The EV business remains on the company's agenda, but it has moved firmly to the back of the queue behind AI infrastructure.
The bigger open question is tariffs. Foxconn has substantial operations in China and Mexico, both of which are in the crosshairs of US trade policy under the Trump administration. Its shares have fallen 6% so far this year while Taiwan's benchmark index has risen 15%, a gap that reflects how much uncertainty the tariff picture is still injecting into the investment case.
The earnings call on Monday in Taipei was where investors would get their first chance to press management on that exposure, and on whether the strong growth promise for 2026 holds if the trade environment deteriorates further.