Fujikura Remakes Governance as AI Cable Demand Fuels a Rocky Recovery

Fujikura links executive pay to stock performance and ends 60-year audit with PwC, reports record earnings but cautious guidance. Stock swings amid AI infrastructure boom; shareholders vote June 26.

Fujikura is steering into its annual shareholder meeting on June 26 with a slate of structural changes designed to align management incentives with investor interests — and a balance sheet that paints a starkly contrasting picture of record earnings and cautious guidance. The Japanese fiber-optic specialist has put forward a new compensation scheme that ties executive pay directly to the stock’s performance, along with a switch of external auditor for the first time in more than six decades.

Under the proposed remuneration overhaul, board members will receive restricted shares instead of the current cash-based system, with an annual cap of 500 million yen or 212,000 shares. The old scheme will be unwound immediately after shareholder approval. At the same time, Fujikura is replacing PricewaterhouseCoopers with Deloitte Touche Tohmatsu, ending a relationship that stretched back to at least 1963. Management says the move brings a fresh perspective to a company in the midst of what it calls its “fourth founding.”

The governance shake-up arrives on the back of a stellar fiscal year. Revenue jumped nearly 21% to 1.18 trillion yen, while net profit surged 72% to 157 billion yen. Investors, however, punished the stock in May after the board forecast a 0.7% decline in profit for the current year. The monthly loss stood at 13.98%, and the shares slid to around 25.02 euros in Frankfurt before a sharp reversal set in.

That reversal has gathered pace amid renewed interest in Fujikura’s positioning within the artificial-intelligence infrastructure boom. The company supplies fiber-optic cables essential for data centers, and tight supply has given it pricing leverage that distinguishes it from cyclical industrial peers. On Tuesday, when the broader Nikkei 225 posted only marginal gains and declining stocks outnumbered advancers, Fujikura was among the biggest positive contributors to the index. Its sector — non-ferrous metals — was one of the few to show relative strength. By Wednesday, the stock had climbed to 25.75 euros in German trading, a gain of 3.19% on the day.

The bounce, however, has been anything but smooth. Over the past week, Fujikura’s shares have gained 15.42%, yet the one-month chart still shows a loss of 13.98%. The 30-day annualized volatility stands at an extreme 129.37%, and the relative strength index has recovered to 42.6, up from 40.7 before the recovery began. That leaves the stock in neutral territory — far from confirming a sustained uptrend.

Long-term fundamentals remain the central narrative. Fujikura is investing 530 billion yen over three years to expand its fiber-cable capacity, betting that demand from AI hyperscalers will continue to run ahead of supply. Management has set a target of 2.8 trillion yen in sales by 2035 and an operating profit of 580 billion yen. Analysts are broadly supportive: nine of twelve rate the stock a buy, none recommend selling, and the consensus is “Strong Buy.”

Shareholders are also in line for a record payout. The dividend has been doubled to 225 yen per share, raising the payout ratio to 40% and distributing a total of 220 billion yen. The payment is scheduled for June 29, two days after the annual general meeting.

The next event to watch is the first-quarter earnings release in August. A strong showing could provide the catalyst that sends the RSI higher and confirms that Fujikura’s volatile comeback has further room to run. Until then, the interplay between its governance reset, pricing power in AI cables, and the lingering caution around near-term profit guidance will continue to define the stock’s trajectory.