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    Fabrinet (FN) Is Up 6.5% After Record Q2 Revenue Tied To AI Data Center Demand

    Simply Wall St·02/18/2026 09:22:43
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    • Fabrinet recently reported record second‑quarter fiscal 2026 revenue of US$1.13 billion, reflecting 36% year‑over‑year growth driven by strong demand for its high‑bandwidth optical networking products used in AI‑focused data centers.
    • Institutional investors and analysts have emphasized Fabrinet’s niche role in advanced optical hardware for data centers, suggesting that AI‑related workloads are becoming an increasingly important engine for its manufacturing business.
    • We’ll now examine how Fabrinet’s record quarterly revenue tied to AI data‑center demand may reshape its existing investment narrative and assumptions.

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    Fabrinet Investment Narrative Recap

    To own Fabrinet, you need to believe that demand for high speed optical hardware in AI and cloud data centers can support its premium valuation despite high customer concentration and capital intensity. The record US$1.13 billion quarter reinforces the near term AI data center catalyst, but it also magnifies the key risk that a pullback or insourcing decision by a few large customers could quickly change the earnings profile.

    The most relevant recent announcement here is Fabrinet’s Q2 fiscal 2026 report, which showed 36% year over year revenue growth and higher earnings alongside strong AI related data center demand. That performance underpins the bull case that clearing component bottlenecks and ramping newer 800G and 1.6T products could support further growth, but it also raises the stakes if supply chain issues persist or key hyperscale orders slow from these elevated levels.

    Yet behind the strong AI driven quarter, investors should also be aware of the growing risk that a small number of hyperscale customers...

    Read the full narrative on Fabrinet (it's free!)

    Fabrinet's narrative projects $5.4 billion revenue and $537.3 million earnings by 2028. This requires 16.3% yearly revenue growth and about a $204.8 million earnings increase from $332.5 million today.

    Uncover how Fabrinet's forecasts yield a $492.67 fair value, in line with its current price.

    Exploring Other Perspectives

    FN 1-Year Stock Price Chart
    FN 1-Year Stock Price Chart

    Before this record quarter, the most optimistic analysts were already modeling Fabrinet toward about US$5.7 billion in revenue and US$550 million in earnings by 2028, but they also flagged customer concentration as a major vulnerability; this latest AI fueled surprise could either reinforce that bullish path or force a rethink, which is why it is worth comparing how different analysts frame both the upside and the dependence on a few key buyers.

    Explore 7 other fair value estimates on Fabrinet - why the stock might be worth as much as 44% more than the current price!

    The Verdict Is Yours

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.