Fabrinet: AI Growth Is Just Getting Started

Fabrinet delivered 45% Q4 FY2026 revenue growth, driven by surging AI data center demand, with Data Center revenue up 68%. At $380, FN trades at 21x FY2027 EPS, but valuation improves to 17x FY2028 and 13x FY2029 on accelerating earnings growth. DCI and customer diversification are key growth drivers, while capacity expansions could push production to $9.8 billion by early 2027. Buy rating reflects strong long-term outlook, though free cash flow, inventory build, and NVIDIA concentration require close monitoring.

Fabrinet (FN) has had a very strong year, revenue rose by 36% to $4.64 billion in FY2026, and growth accelerated to 45% in the fourth quarter of FY2026. Data center operations are This article was written by Investor Overview 3.09K Followers Follow I'm a passionate investor from the Netherlands with 12 years of stock market experience. My articles usually contain a good overview of important investment criteria. A stock for my portfolio is of interest to me if the company has the following characteristics:1. Companies that are growing in both revenue, earnings and free cash flow.2. Companies that have excellent growth prospects.3. Stocks with favorable valuations.I prefer steadily growing companies with high free cash flow margins, dividend stocks and stocks with generous share repurchase programs.Disclaimer: My articles do not provide financial advice, they reflect my own findings and insights. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in FN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.