BlockBeats News, August 18th, NVIDIA supplier Fabrinet announced strong earnings and better-than-expected guidance. However, due to weak performance in data communication and the overall pressure on AI infrastructure stocks, the company's stock price dropped over 11% in pre-market trading to $531.48.

For the fourth quarter, Fabrinet reported adjusted earnings per share of $4.10, higher than the market's expected $3.81. Revenue increased by 45% year-over-year to $1.32 billion, surpassing analysts' expectations of $1.28 billion. The company expects adjusted earnings per share for the first quarter to be between $4.10 and $4.25, with revenue between $1.375 billion and $1.425 billion, both above market expectations.

The strong performance was mainly driven by data center demand. CEO Seamus Grady stated that current customer demand is "limitless." However, the company's data communication business saw a 1% sequential revenue decline to $258 million, while the high-performance computing business grew by 11% to $118 million, raising investor concerns. B. Riley lowered Fabrinet's target price from $635 to $598 and maintained a "Neutral" rating.

Fabrinet is also a key supplier to NVIDIA, but B. Riley's data shows that its revenue from NVIDIA in the 2026 fiscal year declined by 21% to $742 million. Barclays and JPMorgan, while raising their target prices to $739 and $695, respectively, also highlighted concerns in the data communication and high-performance computing businesses.

As of pre-market trading on August 18th, Fabrinet has risen 31% year-to-date and over 80% in the past 12 months.