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.

Foxconn has hit a turning point. For the first time, it has made more money from building AI servers than from assembling Apple’s iPhones. In the three months to June, sales from its cloud and networking products,