6. Fabrinet (NYSE:FN)
Stock Upside: 6.56%
Number of Hedge Fund Holders: 44
Fabrinet (NYSE:FN) is one of the best optical networking stocks to buy according to analysts. On May 5, analysts weighed in on Fabrinet’s (NYSE:FN) Q3 FY2026 results, where Rosenblatt raised its price target on the stock to $750 from $715.
Rosenblatt argued that Fabrinet’s optical circuit switching (OCS) and co-packaged optics (CPO) have immense potential to boost the company’s revenue. On CPO specifically, the firm noted that Fabrinet has been deliberately building out its advanced semiconductor packaging capabilities. The company has also been investing in scalable manufacturing and broader system-level integration to make itself an indispensable player in the CPO supply chain as that technology moves from early-stage development toward commercial deployment, Rosenblatt added.
Rosenblatt also pointed out that Fabrinet’s minority investment in Raytek Semiconductor, a Taiwan-based company specializing in advanced wafer-level packaging technologies, is a move that sets the company up for massive control within the CPO supply chain. In the analyst’s view, this deal means that Fabrinet has evolved from being primarily a silicon photonics manufacturer to becoming a more integrated player capable of delivering higher-value solutions at the system level within the CPO ecosystem.
For Wolfe Research, the analysts acknowledged that Fabrinet’s Q3 FY2026 earnings were solid. However, they pointed out that the sequential decline in Datacom segment’s revenue was likely to disappoint the market.
Wolfe noted that the Telecom segment posted strong performance, and that Fabrinet secured new direct-to-hyperscaler transceiver deals that bypass the traditional merchant supply chain. These two, the analysts said, are encouraging developments because they give the company a more direct line into major cloud infrastructure buildouts.
Fabrinet (NYSE:FN) is an optical networking manufacturing and precision optical assembly company. It provides outsourced manufacturing services for optical transceivers, lasers, and complex electro-optical components used in data centers and telecom networks.
While we acknowledge the potential of FN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than FN and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see the 5 Best Optical Networking Stocks to Buy According to Analysts.
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