Foxconn reported a 34% rise in third-quarter profit on Thursday, beating forecasts as booming demand for artificial intelligence servers reshapes the world's largest contract electronics maker beyond assembling Apple iPhones.

The Taiwanese company, formally known as Hon Hai Precision Industry, posted net profit of NT$77.5 billion, about $2.35 billion, for the July-to-September quarter, up from NT$57.7 billion a year earlier. Reuters reported the result was above the NT$69.6 billion average estimate compiled by LSEG. Revenue jumped 46% to NT$3.016 trillion, roughly $92 billion.

The engine of that growth is the cloud and networking division, which includes AI servers and accounted for 54% of group revenue in the quarter, up from 51% in the previous three months. Foxconn is Nvidia's biggest server maker as well as Apple's top iPhone assembler, giving it exposure to both the AI infrastructure boom and consumer electronics.

AI racks to drive 2027 growth

Chairman Young Liu said Foxconn expected high-double-digit growth in AI rack shipments in 2027 and remained confident about the company's operating outlook. The company stuck to its forecast of strong revenue growth for 2026 and said it saw robust AI demand through this year and into next. It also expects AI server rack shipments to grow by a high-double-digit percentage in the fourth quarter, and to more than double for the full year compared with 2025.

October sales underlined the momentum, reaching a record NT$1.31 trillion, up 46% from the same month a year earlier. Foxconn is expanding its manufacturing footprint for Nvidia AI servers in Mexico and Texas, and shifting most US-bound iPhone production to India.

Shortages are the watchpoint

There was a note of caution alongside the strong numbers. Liu warned that shortages of chips, memory and other essential components could constrain production into next year, a reminder that the AI supply chain is stretched at almost every link. Revenue grew faster than profit in the quarter, leaving the net margin slightly thinner than a year earlier, at about 2.6% against 2.8%.

Even so, the result is a fresh sign that the AI spending boom is still feeding through to suppliers. Cloud providers have kept ordering servers despite investor doubts about whether data-centre investment will pay off, and Foxconn, which holds about 40% of the global AI server market by its own account, is one of the clearest beneficiaries. The test for the company now is whether it can secure enough components to keep pace with the orders it is already winning.