Foxconn Stock Falls as $1.4B Profit Misses Wall Street by a Wide Margin

TLDR

• Foxconn’s Q4 2025 net profit fell 2% to NT$45.21 billion (~$1.41B), missing analyst estimates of NT$60.88 billion by a wide margin
• Revenue jumped 22% year-on-year to NT$2.606 trillion, driven by AI server demand
• A higher tax rate was blamed for the profit miss, not weak demand
• AI server and cloud/networking revenue made up 42% of total Q4 revenue
• Foxconn guided for “strong growth” in Q1 2026 and the full year, targeting a 40% market share in AI servers

Foxconn posted record Q4 revenue but a surprise profit miss as a higher tax bill ate into its bottom line. The company still expects strong growth ahead, driven by AI server demand.

Q4 net profit came in at NT$45.21 billion ($1.41 billion), down 2% from a year ago. That badly missed the NT$60.88 billion consensus estimate from FactSet, and the NT$63.86 billion LSEG forecast.

Revenue told a different story — rising 22% year-on-year to NT$2.606 trillion. That was a record quarter for the company.

The gap between strong revenue and weak profit came down to one thing: taxes. A higher tax rate in the quarter hit the bottom line hard. Gross profit margin also slipped, falling to 5.88% from 6.15% a year earlier.

AI servers are now a core part of Foxconn’s business. Cloud and networking products — a category that includes AI servers — accounted for 42% of total Q4 revenue. That’s up from 41% in Q2, when the segment first overtook smart consumer electronics as the company’s biggest revenue driver.

Foxconn makes servers for Nvidia and assembles iPhones for Apple. Its factories in India now produce the bulk of iPhones sold in the U.S., while new facilities in Mexico and Texas are being built to make Nvidia AI servers.

Strong Outlook for 2026

Liu added that major customers expect the AI industry to reach $1 trillion in size within that timeframe. Foxconn is targeting a 40% market share in AI servers.

It was the first time the company has issued a full-year revenue outlook for 2026. Both Q1 and full-year guidance are rated “strong growth” — the highest level Foxconn assigns.

Geopolitical Risk Flagged

He did not elaborate further. Supply chain risks linked to Middle East tensions have been a recurring concern for global manufacturers.

On the consumer electronics side, Foxconn expects strong year-on-year growth in smart devices. Liu said memory shortages and price increases haven’t hurt demand much, given the company’s skew toward higher-end models.

The PC segment is a different story — Foxconn expects a year-on-year decline there in Q1.

Foxconn’s stock has dropped 6% so far in 2026, underperforming the 15% gain in Taiwan’s benchmark index.

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