Foxconn on Thursday forecast a significant rise in third-quarter revenue as the world's biggest iPhone maker said it had for the first time made more money from its AI server business than from smart electronics last quarter.

Taiwan's Foxconn, the world's largest contract electronics maker, reported Thursday that its second-quarter operating profit rose 27% year over year, as it leans into its artificial intelligence server business.

Hon Hai Technology Group, better known as Foxconn, is reporting that its second-quarter profits climbed due to its AI server sales, which are now making up the largest portion of revenue for the electronics giant, surpassing smartphones as its top revenue source.