Foxconn Industrial Internet’s 2Q26 Profit Meets Expectations as AI Product Ramp Begins in 3Q26: Goldman Sachs
Foxconn Industrial Internet’s (601138.SS) second-quarter 2026 net profit rose 24% sequentially to Rmb13 billion, in line with the midpoint of its guidance.
Foxconn Industrial Internet’s (601138.SS) second-quarter 2026 net profit rose 24% sequentially to Rmb13 billion, in line with the midpoint of its guidance. In the first half of 2026, GPU AI server shipments increased 320% year over year, ASIC AI server shipments rose 300%, and shipments of 800G-and-faster switches increased 140%. Operating cash flow rose 425% year over year.
Goldman Sachs identified seven sequential gross-margin growth drivers for the third and fourth quarters of 2026. They include the mass production of new GPU AI server racks, customer expansion, the mass production of co-packaged optics switches, and the mass production of foldable-screen iPhones.
Goldman Sachs forecasts Foxconn Industrial Internet’s 2027E net profit at 17% above Bloomberg consensus. It expects net profit to post a 56% compound annual growth rate from 2025E through 2028E, compared with 5% from 2021A through 2024A.
Goldman Sachs said the company’s second-quarter results were in line with expectations, while new AI products are expected to ramp significantly from the third quarter of 2026. It also cited strong operating cash flow as support for growth and said 2027 earnings could substantially exceed market consensus, by 17%.
Among peers, it lists Wiwynn, Wistron and Huaqin as Buy-rated companies, while identifying BYDE and Inspur as Sell-rated peers. Goldman Sachs’ forecast of 2027E net profit 17% above Bloomberg consensus suggests that the market may be underestimating the improvement in leading companies’ competitive barriers.
Potential catalysts are: the mass production of new GPU AI server racks beginning in the third quarter of 2026; the mass production of co-packaged optics switches and the ramp-up of high-speed switches; continued ramp-up of ASIC AI servers; mass production of foldable-screen iPhones; and third- and fourth-quarter 2026 results, for which Goldman Sachs expects sequential revenue growth of 35% and 64%, respectively.
Goldman Sachs identified seven sequential gross-margin growth drivers for the third and fourth quarters of 2026. They include the mass production of new GPU AI server racks, customer expansion, the mass production of co-packaged optics switches, and the mass production of foldable-screen iPhones.
Goldman Sachs forecasts Foxconn Industrial Internet’s 2027E net profit at 17% above Bloomberg consensus. It expects net profit to post a 56% compound annual growth rate from 2025E through 2028E, compared with 5% from 2021A through 2024A.
Goldman Sachs said the company’s second-quarter results were in line with expectations, while new AI products are expected to ramp significantly from the third quarter of 2026. It also cited strong operating cash flow as support for growth and said 2027 earnings could substantially exceed market consensus, by 17%.
Among peers, it lists Wiwynn, Wistron and Huaqin as Buy-rated companies, while identifying BYDE and Inspur as Sell-rated peers. Goldman Sachs’ forecast of 2027E net profit 17% above Bloomberg consensus suggests that the market may be underestimating the improvement in leading companies’ competitive barriers.
Potential catalysts are: the mass production of new GPU AI server racks beginning in the third quarter of 2026; the mass production of co-packaged optics switches and the ramp-up of high-speed switches; continued ramp-up of ASIC AI servers; mass production of foldable-screen iPhones; and third- and fourth-quarter 2026 results, for which Goldman Sachs expects sequential revenue growth of 35% and 64%, respectively.