We recently published a list of 10 Stocks That Could Skyrocket After Jensen Huang’s Earnings Call. In this article, we are going to take a look at where Fabrinet (NYSE:FN) stands against other stocks that could skyrocket after Jensen Huang’s earnings call.
DeepSeek AI revelations were the biggest concern for investors when the month started. Many had started questioning if investing so much in AI infrastructure was worth it. Since then, the market sentiment has turned positive again and many of the stocks have recovered. We are now closing in on the most anticipated earnings call of the year so far: Jensen Huang telling us on 26th February how his company performed in the previous quarter.
Investing in the supply chain of big companies has proven beneficial over the years. As the stronger and the bigger company grows, it helps the smaller companies which are an important part of the supply chain also grow.
The Santa Clara-based chipmaker’s earnings will affect the whole market, not just its suppliers. Analysts expect an earnings beat on both the EPS and revenue. This is what the KeyBanc analysts had to say about the earnings:
“Despite prior concerns regarding constraints associated with the ramp of GB200 NVL servers, we expect NVDA to report strong F4Q results, which we anticipate will solidly beat, and to guide F1Q conservatively and moderately higher than consensus.”
We decided to take a look at companies that will benefit from the above-mentioned earnings beat. To come up with our list of 10 stocks that could skyrocket after Jensen Huang’s earnings call, we looked at stocks that are major suppliers of the company.
An automated assembly line displaying the advanced packaging technology used by the company.
Fabrinet (NYSE:FN)
Fabrinet is an electro-mechanical, optical packaging & precision optical, and electronic manufacturing services provider. It offers different electro-mechanical and advanced optical capabilities for manufacturing processes which include supply chain management, advanced packaging, process design and engineering, and others. The company sells its products and services to modules and subsystems, medical devices, industrial lasers, and other industries.
Fabrinet announced its Q2 earnings result earlier in February which surpassed analyst estimates. The company’s Optical Communications revenue went up by 14% while Non-Optical Communications revenue increased by 29% YoY. Though the gross margins were slightly down from the 1st quarter, it was mainly due to currency instability. Operating margins also improved by 10.6%.
The stock was down 8% in the last month and has not recovered even after strong results. It might be due to the downturn in its datacom segment, which was the key player in the previous gain in the stock. According to the management, the datacom revenue will be down in the next quarter as well. This downturn might reverse gradually but a strong earnings report from the leading GPU maker this week could set the stock on a recovery path.
Overall, FN ranks 4th on our list of stocks that could skyrocket after Jensen Huang’s earnings call. While we acknowledge the potential of FN as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as FN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
