The ANSYS software is used for finite element numerical simulation to analyze the failure mechanism of local compression in concrete cone foundations in conjunction with previous experimental experience. The results reveal that the “hooping action” of surrounding concrete and the arch structure under the compression zone causes the increase of local compression in the concrete cone foundation. According to the findings of the analyses, the failure of local compression in concrete cone foundations is caused by the combined action of top shear force, middle splitting force, and top splitting force. The results also demonstrate that the failure mechanism of local compression in concrete cone foundations may be explained more rationally by integrating the theories of hoop strengthening and shear strength. These results serve as a basis for further study into the calculation method of cone foundation local compression.