Foxconn Stock Drops Despite Strong Q2 Sales Driven by AI and iPhone

• Foxconn stock dropped to NT$63.10 despite a strong quarterly performance.
• Q2 revenue soared by 15.8 percent year-on-year, reaching NT$1.8 trillion.
• AI server demand and iPhone sales were key growth drivers for Foxconn.
• Geopolitical tensions are pushing Foxconn to diversify its manufacturing footprint.
• Chairman Young Liu remains optimistic about long-term revenue goals.

Stock Drops Despite Strong Q2 Sales Performance

Foxconn Technology Co., Ltd., known by its ticker 2354.TW, faced a noticeable decline in its stock, which slipped to NT$63.10 on July 4. This drop amounted to a 2.17 percent decrease during one trading day, an unexpected turn considering the company’s impressive quarterly performance. The surge in revenue, driven by strong demand for artificial intelligence servers and Apple’s latest iPhones, didn’t seem enough to assuage nervous investors, highlighting broader concerns about market volatility and geopolitical uncertainties.

AI and Apple Propel Foxconn’s Record-Breaking Quarter

During the second quarter, Foxconn reported a staggering revenue growth of 15.8 percent year-on-year, totaling NT$1.8 trillion, or around US$62 billion. This significant uptick can be traced back to two primary drivers: the unshakeable grip Apple maintains on the smartphone sector and the burgeoning demand for AI servers utilizing Nvidia’s cutting-edge technology. As a vital supplier for both Apple’s smartphones and various prominent cloud service providers, Foxconn stands squarely at the forefront of the rapidly evolving AI and consumer electronics landscape.

Geopolitical Tensions Cloud Market Outlook

However, the company’s stock sentiment is burdened with pressures stemming from geopolitical shocks and changing global trade winds. Analysts warn that the U.S. tariffs proposed on goods shipped through Vietnam, where Foxconn also conducts substantial business, could create significant headwinds. This compels the firm to consider diversifying its manufacturing strategy, particularly moving beyond its significant presence in China and Southeast Asia. For instance, Chairman Young Liu has hinted at potential partnerships on U.S. soil, showing a willingness to adapt to new economic realities.

Foxconn’s Diversified Portfolio Proves Resilient

On a more positive note, Foxconn’s strength lies in its diversified portfolio, which provides a buffer against the turbulent market. The company’s ongoing initiatives in AI infrastructure complement its traditional consumer electronics offerings, thus creating stable revenue avenues. While the sales of Apple’s iPhones can be erratic, the expanding demand for AI servers reflects a broader trend of enterprise and cloud investments, potentially delivering steadier growth. In fact, from January to May 2025, Foxconn showed a robust consolidated revenue of NT$2.899 trillion (or US$96.9 billion), up 21.65 percent from last year, signaling potential resilience amid uncertainty in the tech market.

In summary, Foxconn’s recent stock drop to NT$63.10, despite a strong showing in Q2 sales bolstered by AI and Apple products, reveals investor caution amid geopolitical unrest. While challenges loom, the company’s dual focus could help it navigate through these turbulent waters as it seeks to diversify its manufacturing strategies. With long-term revenue projections intact and strong performance metrics, Foxconn appears poised to remain a critical player in global tech supply chains, albeit with increased caution moving forward.