Apple’s iPhone maker Foxconn on Friday recorded a decline of 9.6%. Revenues for the first quarter of 2024 increased year-over-year.
A company trading as Hon Hai Precision Industry In Taiwan, Recorded first quarter earnings 1.32 trillion New Taiwan dollars ($41.2 billion), which also decreased by 28.58% compared to the fourth quarter of last year. Economists’ forecasts in the LSEG survey were also lower than expected.
The company still expects revenue to increase, even though it said the second quarter “remains a traditional off-peak season.”
Foxconn’s stock price fell 1.4% by Taiwan’s market close on Friday, ahead of the company’s data release at 15:30 pm local time.
The first quarter is typically a quiet period for smartphone component makers, as consumers tend to be less interested in devices. In the fourth quarter, tech suppliers often compete to supply smartphones, tablets and other electronic devices for tech giants like Apple to meet demand during the holiday period.
Currently, there is no data available regarding smartphone shipments for Q1 2024.
According to Counterpoint Research, overall shipments fell 3.2% last year to 1.17 billion units.
AI is gaining attention for investors
Foxconn said cloud and networking products are a bright spot for the Taiwanese technology giant, with strong growth expected in this area.
The company said, “The strong attraction of customers to the cloud sector offset the negative impact of inventory exhaustion of network products.”
Foxconn has been seen as a company to benefit from the recent buzz around artificial intelligence. The company’s stock price has increased 14% in the past 12 months.
However, it has fallen short of NVIDIA, a powerhouse AI chip maker whose stock price has more than tripled over the same period.
But Foxconn has been on a roll lately, with shares up nearly 21% since the beginning of the year.
Foxconn makes enterprise servers for AI applications. The cloud is a key technology that powers today’s advanced generative AI.
In its March investor update, Foxconn issued a bullish earnings forecast, expecting a sharp increase in revenue due to a surge in demand for AI servers.
Foxconn is scheduled to hold its next earnings release on May 14th.
Last year, Foxconn and chip manufacturing giant Nvidia announced they were partnering to develop an “AI factory.” The company calls it a new class of data centers that use Nvidia chips to power a “broad range” of applications, including self-driving car training. Robot platforms and large-scale language models.