Fabrinet Stock Tumbles on Nvidia Slump, But Analysts Remain Bullish

Fabrinet, a company that provides optical packaging and precision manufacturing services, saw its stock drop nearly 20% after it reported record-breaking quarterly results. The decline was largely due to a slight dip in datacom revenue, which fell 1% from the previous quarter.

However, this marginal decrease was largely attributed to lower sales to Nvidia, one of Fabrinet's largest customers. Despite this, the company still managed to beat estimates on almost every line, with revenue rising 45% year-over-year to a record $1.32 billion in its fiscal fourth quarter.

CFO Csaba Sverha described the demand environment as 'robust and accelerating', and analysts remain bullish on the stock. BNP Paribas recently kept its 'Outperform' rating with a price target of $750, citing Fabrinet's strong multiyear demand and aggressive capacity expansion.