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FN

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Thesis. The most consistent operator in optics — five straight earnings beats, FY26 revenue up 36%, and 50% more capacity being built. It is trusted with confidential designs precisely because it has no products of its own. The limit is that it earns a manufacturing fee rather than scarcity pricing.
Reviewed 19 September 2026, after Q4 FY2026 results and the fiscal 2026 annual report. Next review after Q1 FY2027 earnings on 2 November 2026.

What it does

Fabrinet is a contract manufacturer. It builds precision optical products to other companies' designs, under those companies' brands, from a low-cost base in Thailand. CEO is Seamus Grady.
If the optics names in this file are the picks and shovels of AI, Fabrinet is the picks and shovels of the picks and shovels.
Fabrinet has no products of its own, so it competes with none of its customers. That is exactly why they hand it confidential designs — and it's why the real risk is a customer bringing manufacturing in-house rather than a rival winning the work.

Bull case

  • Q4 FY2026: revenue $1,315.8M, up 45%. Non-GAAP EPS $4.10 against $2.65, GAAP $3.83 against $2.42
  • The full year confirms it. FY26 revenue $4.64B, up 36%, with non-GAAP EPS $14.09 against $10.17 — earnings growing faster than sales
  • The beat streak reached five quarters, which was the open question at the last review
  • Guidance steps up again. Q1 FY27 revenue $1.375–1.425B with non-GAAP EPS $4.10–4.25
  • Capacity is being built ahead of demand. A roughly 2.0 million square foot building under construction at the Chonburi campus — around 50% more capacity — plus an 8-acre Navanakorn campus acquired in May 2026
  • The mix keeps improving. Data centre products reached 47.9% of revenue in FY2026, up from 46.2%
  • NVIDIA is now its second-largest customer at 16.3% of revenue, which moves Fabrinet from optics contract manufacturer toward AI systems manufacturer

Bear case

  • It earns a manufacturing fee, not scarcity pricing. Gross margin is low by design and will never resemble that of a bottleneck owner
  • Concentration is severe and getting worse. Four customers were 57.4% of FY2026 revenue. Losing Cisco alone would be a 20% revenue event
  • Volume story, not price story. It grows only as fast as total industry optical volume, so it cannot outrun a cycle
  • Insourcing is the structural risk. If a large customer takes manufacturing in-house, or NVIDIA backs a competing manufacturer, the position erodes quickly
  • Upstream shortages cap output directly — if the laser makers can't supply, Fabrinet can't build
  • Growth is mid-pack in a category where several peers are printing 50–60%

Major customers

From the fiscal 2026 annual report. These are the customers disclosed at 10% or more of revenue — together 57.4% of the total.
  • Cisco — 19.9% of revenue, the largest by some way
  • NVIDIA — 16.3%, now the second-largest and the most important trend line on this page
  • Nokia — 10.7%
  • Amazon — 10.5%
  • Coherent, Lumentum and other optics names — still customers, but no longer disclosed above the 10% threshold
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Read-through — and it has changed. This file previously treated Fabrinet as a direct proxy for
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LITE and
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COHR shipment volumes, on the basis that Lumentum was roughly 15% of its revenue. That is no longer true. In FY2026 Lumentum is not among the 10%-plus customers, while Amazon and Nokia have appeared. The optics proxy has weakened considerably.
What the list says now is different and arguably more interesting: with Cisco at 19.9%, NVIDIA at 16.3% and Amazon at 10.5%, Fabrinet reads across to
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NVDA and hyperscaler build rates more directly than to the laser makers. Nokia at 10.7% brings telecom exposure, which is the same carrier-capex signal that runs through
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CIEN.
Fabrinet's capacity constraints still become its customers' capacity constraints. That part holds.

What would change the view

  • Whether the beat streak reaches six quarters
  • Chonburi ramp timing and utilisation — the 2.0 million square feet has to fill
  • Customer concentration next year — whether NVIDIA passes Cisco, and whether the top four exceed 57.4%
  • Data centre share of revenue, now 47.9% and rising
  • Net margin trend as the data centre mix lifts
  • Any customer announcing in-house manufacturing — the single event that breaks this

Update log

  • 19 Sep 2026 — Q4 and full-year FY2026 results added (Q4 revenue $1,315.8M +45%; FY26 $4.64B +36%; non-GAAP EPS $14.09). Customer concentration refreshed from the FY2026 annual report, and it materially changed the read-through: Cisco 19.9%, NVIDIA 16.3%, Nokia 10.7%, Amazon 10.5%, together 57.4%. Lumentum is no longer a 10%-plus customer, so Fabrinet is a much weaker proxy for Lumentum's volumes than this page previously claimed.
  • 11 Sep 2026 — Reviewed.
  • 7 Aug 2026 — Full review after Q3 FY2026.
Research and education only — not investment advice.