Fujikura’s American Wait: Delayed US Factory Sends Shares Down as Rally Cools

Fujikura shares drop for fifth straight day after revealing US plant won't start until 2030, full capacity by 2035, dampening near-term AI infrastructure gains.

Fujikura’s stock came under fresh pressure on Tuesday, sliding 2.44 percent to 4,563 yen with 37.7 million shares changing hands. The trigger was a sobering timeline disclosed by President Naoki Okada: the company’s much-anticipated US optical cable plant will not begin production until 2030, with full capacity not expected until fiscal 2035. That puts the new facility well beyond the current mid-term plan that runs through fiscal 2028, dashing hopes for near-term earnings contributions from the AI infrastructure boom.

The selloff marks a fifth straight losing day for the Japanese cable and fiber-optic specialist, leaving the stock down around 11 percent from its May 27 close. The Topix index, by comparison, fell just 0.42 percent over the same span. Profit-taking has intensified after a spectacular rally that saw the shares hit a high of 7,933 yen on May 14 before tumbling to 4,156 yen on May 20. A brief bounce failed at the 25-day moving average, and on June 1 the price slipped below the 75-day line, testing the lower edge of the Ichimoku cloud. Technical analysts warn that a sustained break could invite further selling.

Despite the pullback, Fujikura’s valuation remains stretched. The stock trades at a price-to-earnings ratio of 48.6 based on the company’s own forecast and a price-to-book ratio of 13.5, giving it a market capitalization of 8.1 trillion yen. Investors are questioning how much of the AI fiber narrative is already priced in, especially given that the new US capacity—and a separate plant in Chiba Prefecture due to start in 2029—will not contribute meaningfully to results for years.

The investment program behind that expansion was unveiled on May 14, with Fujikura committing up to 300 billion yen for facilities in Japan and the US, including roughly 40 billion yen for the Sakura site in Chiba. A new wholly owned subsidiary, Fujikura Optical Cable Systems LLC, is set to be registered in Delaware in June 2026. The plant’s final location will depend on the availability of hydrogen and other raw materials, energy supply, and government incentives. Given the timeline, the impact on earnings for the current fiscal year ending March 2027 will be negligible.

That cautious outlook stands in contrast to the company’s most recent financial performance. In the fiscal year that ended March 2026, Fujikura posted revenue of 1.182 trillion yen, up 20.7 percent year-on-year. Operating profit surged 39.2 percent to 188.7 billion yen, while net profit jumped 72.5 percent to 157.2 billion yen. The strong results reflect robust demand for optical communications gear used in AI data centers and telecom infrastructure.

Looking ahead, Fujikura forecasts a more moderate pace of growth for fiscal 2027. Revenue is seen rising 5.1 percent to 1.243 trillion yen, with operating profit climbing 11.8 percent to 211 billion yen. Net profit, however, is expected to slip 0.7 percent to 156 billion yen—a rare blemish in an otherwise solid outlook. Operating cash flow came in at 132.9 billion yen last year, and the company holds 178.9 billion yen in cash reserves. The dividend remains modest at 38 yen per share, yielding 0.83 percent at the current price. A 6-for-1 stock split executed in early April lowered the per-share price but did nothing to alter the underlying valuation.

The market’s message is clear: the business model is intact, but the price tag is under scrutiny. The AI infrastructure story continues to drive demand for fiber-optic cables, and Fujikura’s long-term position appears strong. But the gap between today’s overheated valuation and the distant payoff from new capacity has given investors reason to step back. Attention now turns to the June 2026 establishment of the US subsidiary, the final site decision, and the availability of critical inputs like hydrogen. Until the timeline delivers tangible results, the stock’s future will hang on whether quarterly results can vindicate the frothy multiples—or whether the wait proves too long for patience to hold.