Foxconn posted a sharp increase in earnings for the first quarter of 2025, but cut its full-year guidance Tuesday, citing currency headwinds and U.S. trade policy risks.

Revenue climbed 24.2% year over year in the JanuaryMarch quarter, supported by strong sales of AI servers. While Foxconn expects Q2 to deliver continued year-on-year growth in its server segment, Chairman Young Liu said the company was now taking a more cautious view on full-year growth compared to March.

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The change in guidance reflects the recent appreciation of the Taiwan dollar, which Liu said may affect revenue performance after conversion. He also pointed to volatile U.S. tariff developments as another challenge, even as Washington and Beijing recently agreed to suspend some tariffs for 90 days.

Foxconn remains a key assembler for Apple's (AAPL, Financials) iPhones and a critical partner for Nvidia (NVDA, Financials) in building AI servers, including out of a new facility in Mexico.

Nvidia recently announced plans to manufacture $500 billion worth of AI servers in the U.S. over four years, in partnership with Foxconn and TSMC.

Foxconn is also pursuing growth in electric vehicles. Its subsidiary, Foxtron, signed a memorandum of understanding with Mitsubishi Motors for an EV supply project. The company is in talks with Nissan on further collaboration, but no agreement has been finalized.

Foxconn stock has declined 11.4% so far this year, underperforming the broader Taiwan index, which is down 5.4%. Shares rose 3.2% on Wednesday ahead of the earnings call.

Investors should monitor future FX policy decisions, updates on tariff extensions, and the company's next moves in AI server production and EV expansion.

This article first appeared on GuruFocus.

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