Fabrinet (FN) Rose Following the Rising Demand for Data Center Spending

Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned 7.46% compared to a 12.60% return for the Russell 2000 Value Index. In the first three quarters of 2025, the Fund returned 13.77%, compared to 9.04% for the index. As the firm’s focus is on a diligent, disciplined, and patient process, it expects the fund to outperform in down markets and trail in speculative markets. Additionally, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, the FPA Queens Road Small Cap Value Fund highlighted stocks such as Fabrinet (NYSE:FN). Fabrinet (NYSE:FN) offers optical packaging and precision optical, electro-mechanical, and electronic manufacturing services. The one-month return of Fabrinet (NYSE:FN) was -4.85%, and its shares gained 76.79% of their value over the last 52 weeks. On November 24, 2025, Fabrinet (NYSE:FN) stock closed at $462.67 per share, with a market capitalization of $16.576 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding Fabrinet (NYSE:FN) in its third quarter 2025 investor letter:

"Fabrinet (NYSE:FN) is a contract manufacturer specializing in optical networking equipment and modules. This is complex work at small scales, and Fabrinet dominates its niche. Fabrinet has experienced impressive historical revenue growth and growing operating margins. The company’s highest bandwidth products are finding increasing demand in data centers, especially those data centers used to train artificial intelligence models. In 2023, Fabrinet disclosed that Nvidia is a 10% customer. The stock price has roughly doubled since April on rising expectations for data center spending. -We believe such spending may have gotten ahead of itself and have been trimming. But the need for high bandwidth networking will continue, Fabrinet dominates its core telecom and data center markets and has prudently diversified into auto components and laser assembly. We believe Fabrinet will be a “compounder” for many years , and we continue to hold a position."

Fabrinet (NYSE:FN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 32 hedge fund portfolios held Fabrinet (NYSE:FN) at the end of the second quarter, compared 38 in the previous quarter. Fabrinet (NYSE:FN) generated $978 million in revenue for fiscal Q1 2026, increasing 22% year-over-year, and an 8% from previous quarter. While we acknowledge the potential of Fabrinet (NYSE:FN) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Fabrinet (NYSE:FN) and shared LRT Global Opportunities Strategy's views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.