Foxconn Technology Group reported better-than-expected profit for the third quarter, thanks to continued high demand for AI-related hardware, the latest sign that its recent focus is paying off.

The Taiwanese company, formally known as Hon Hai Precision Industry, has been taking steps in recent years to diversify its lines of business, which now include servers and electric vehicles. Known for assembling iPhones for Apple, among other things, Foxconn is playing an increasingly important role in building AI servers for U.S. tech giants such as Amazon and Nvidia.

The world's largest contract electronics maker on Thursday said its third-quarter net profit rose 14% to 49.325 billion New Taiwan dollars, equivalent to US$1.52 billion, beating analysts' expectations. Revenue rose 20% to NT$1.855 trillion, a record for the period.

AI-server sales grew over 200% in the first nine months of the year and are expected to be the biggest driver of Foxconn's business in 2025, Chairman Young Liu said during the earnings call.

Foxconn's cloud and networking business, which includes its AI servers, is its second-biggest source of revenue after consumer electronics. The division's contribution has risen steadily over the past quarters, accounting for 32% of overall revenue in the third quarter.

The company said it expects its AI-server shipments to grow sequentially and account for more than 50% of total server revenue in 2025, up from around 40% currently, as the AI industry enters a period of fast growth.

Liu said demand for Nvidia's GB200 servers is "insane," reiterating that the company will start shipping a small number of the servers in the final quarter of the year, with large-volume shipments in 2025. At an event in October, Foxconn said it was building the world's largest GB200 manufacturing facility in Mexico to meet the strong demand.

Consumer electronics sales, mainly from iPhones, were flat from a year earlier, in line with its previous guidance.

Thanks to the AI boom, Foxconn's stock has doubled this year despite dropping more than 10% in the third quarter as renewed fears about a slowing U.S. economy fueled a global selloff.