Fabrinet upgraded to Outperform from Market Perform at Northland

Northland upgraded Fabrinet (FN) to Outperform from Market Perform with a price target of $220, up from $200. A recent pullback in the shares has likely been driven by continued inventory driven weakness at Telecom customers, as highlighted by recent reports from direct customer Infinera (INFN) and indirect customer Ciena (CIEN), as well as concerns around copper versus optical connectivity in AI Data Center, the analyst tells investors. However, the firm views the pullback as “overdone” and believes the company remains well positioned to benefit from growth in AI data center at top customer Nvidia (NVDA) and more broadly at 800G and eventually 1.6T given increasing AI driven throughput.