On Tuesday, Rosenblatt Securities increased its price target on Fabrinet (NYSE:FN) shares to $260 from the previous $230, while maintaining a Buy rating on the stock. The adjustment follows Fabrinet's robust performance, particularly in its 800G VCSEL-based Active Optical Cable (AOC) and transceiver segment, which collaborates with Nvidia (NASDAQ:NVDA).
Fabrinet, which produces Nvidia-branded products, has been recognized as the leading manufacturer of VCSEL-based AOCs. These components are predominantly utilized for GPU interconnections, a critical function in high-performance computing environments. The company's success in this area has been a driving factor behind the revised price target.
The analyst from Rosenblatt Securities noted that the company's recent results and the insights shared during their conference call should alleviate any concerns investors might have regarding Fabrinet's market growth, competitive landscape, and the potential threat of copper substitution.
Copper has been considered a possible alternative for optical connections, but it does not appear to be a significant concern for optical companies at this time.
In light of Fabrinet's performance and the positive outlook on its business, Rosenblatt Securities has increased its estimates for the company. The new price target of $260 reflects the firm's confidence in Fabrinet's continued growth and its strong positioning within the optical communication industry.
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