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Foxconn, formerly known as Hon Hai Precision Industry Co (TW:2317), saw a surge in its shares on Friday following robust fourth-quarter earnings and optimistic projections fueled by increased demand from the artificial intelligence sector.

Shares of Foxconn in Taiwan soared by as much as 9% to reach a level not seen in over five years, hitting T$132, significantly outperforming the modest 0.4% decline in the Taiwan Weighted index.

Despite a 6% drop in revenue attributed to declining smartphone part sales, Foxconn reported a remarkable 33% increase in net profit for the fourth quarter.

During a post-earnings call, Chairman Young Liu expressed confidence in heightened demand for AI servers from clients, forecasting a revenue growth of over 30% in 2024 for this segment.

While Foxconn’s direct exposure to the AI industry is limited, the anticipated surge in server and computing needs from the AI sector is expected to drive demand for the company’s network products.

In addition to increased sales of cloud devices, networking products, and consumer electronics beyond smartphones, Foxconn’s biggest customer, Apple Inc (NASDAQ:AAPL), also surpassed quarterly estimates for its fourth-quarter earnings. However, concerns lingered over Apple’s slowing sales in China.

Foxconn cautioned that first-quarter revenue is likely to decline compared to the previous year, citing the significant boost in Q1 2023 revenue due to a rebound in Chinese sales following the country’s emergence from three years of COVID-related lockdowns.

Looking ahead, Foxconn anticipates maintaining steady capital expenditure as it explores expansion opportunities into new sectors, including automobiles and potentially semiconductors.