Benzinga - by Priya Nigam, Benzinga Staff Writer. Shares of Fabrinet (NYSE: FN) skyrocketed in early trading on Tuesday, after the company reported its fiscal fourth-quarter (Q4) results.
The company reported strong results and guidance, with artificial intelligence (AI) performing “way ahead of forecast,” according to Needham.
The Fabrinet Analyst: Alex Henderson maintained a Buy rating on Fabrinet, while raising the price target from $150 to $165.
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The Fabrinet Thesis: AI growth drove the company’s revenue beat, while Telecom, which has traditionally been the company’s largest business, declined by 16% year-over-year and by 18% sequentially, and “traditional Data Comm declined sharply,” Henderson said.
"AI-related products have gone from near-zero 15 months back to roughly $100-$140 million in just the June quarter," the analyst wrote. "Further, capacity additions of 15%-25% Q-Q appear to be in the cards."
"Once the inventory correction in Telecom and traditional non-AI Data Comm runs its course, we expect rebounds in these businesses will amplify the AI growth," Henderson said.
FN Price Action: Shares of Fabrinet had jumped by 27.47% to $148.79 at the time of publication Tuesday.
Image: Fabrinet
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