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Fujikura raises forecast and plans price increases, but the share price falls by over 11%. The AI boom is driving demand for fiber optic cables.
Brief summary
- Share loses despite positive forecast
- AI boom boosts demand for fiber optic cables
- Price increases planned for key products
- Production capacities reach their limits
Japanese cable manufacturer Fujikura presents an unusual picture. The Management Board raises its forecast and announces price increases. Nevertheless, the share price plummets by over eleven percent.
On Tuesday, the share is quoted at 22.49 euros. The drop of 11.12 percent continues a downward slide: over a 30-day period, the loss amounts to almost 41 percent.
AI boom as a driver
Fujikura's CEO stated on June 9 that the company had exceeded its own expectations. The reason: massive demand from US data centers that specialize in artificial intelligence. These facilities require significantly more fiber optic cable than conventional cloud centers. The supply bottlenecks on the market are correspondingly large.
Production capacities are reaching their limits. The company is responding with a pricing strategy. Customers are already accepting higher prices for key products, and further adjustments are planned. The Group can thus convert the limited capacities into higher sales per unit.
Contradictory signals from the market
Just a month ago, Fujikura triggered a sell-off in Japanese tech stocks with a disappointing profit forecast for the financial year ending March 2027. The outlook was below analysts' estimates. Concerns about production bottlenecks, competitive pressure and supply chain problems weighed on sentiment.
At the time, the Group had factored in worst-case scenarios, such as hydrogen bottlenecks. The Management Board is now confident that it will exceed its own plans for the current quarter.
The fiber optic market as a whole is benefiting from the AI boom. Competitors such as Sumitomo Electric and Furukawa Electric are also following suit. If Fujikura's price increases and the expansion of optical components succeed as planned, the results should be positive.
