Fujikura's Leverage Builds as Delayed US Factory Puts a Damper on the AI Fiber Story

Fujikura plunges 40% from May peak after US optical cable plant delayed to 2030; margin buying ratio at 18x signals further downside risk.

The timeline for Fujikura's much-hyped US optical cable plant just got pushed out to 2030, and the market is voting with its feet. Shares dropped 2.44% to 4,563 yen on June 2, extending a slide that has now erased more than 40% from the May 14 peak of 7,933 yen. The disappointment stems from President Naoki Okada's clarification that local production in the United States — part of a ¥300 billion investment program — won't begin until later this decade, with full capacity utilization not expected until the business year ending March 2035.

That puts the new capacity well outside the current medium-term plan, which runs only through fiscal 2028. A separate facility in Chiba Prefecture is slated to start in 2029, meaning both projects fall beyond the planning horizon investors have been pricing in. The reaction was sharp and immediate: trading volume hit 37.7 million shares on the day, and the stock has now posted five consecutive losing sessions. The technical picture has turned ugly, with the share price sliding below its 75-day moving average on June 1 and testing the lower boundary of the Ichimoku cloud.

But there is another layer of vulnerability that has built up beneath the surface. Margin-buying positions stood at roughly 30.5 million shares as of May 29, up nearly 3.8 million shares from the prior week. Short positions, by contrast, totaled only 1.7 million shares and edged lower. That yields a margin ratio of 18.03 — an exceptionally lopsided setup that points to heavy leveraged longs. When those positions start to unwind, the selling pressure can accelerate sharply, as the recent price action suggests.

The correction began in earnest on May 27, after a massive volume spike on May 26 signaled profit-taking by institutional players. Since then, the stock has lost about 11% in five trading sessions, far outpacing the Nikkei 225's modest 0.30% decline on June 2 alone. The intraday range on the June 2 session was wide, from 4,351 to 4,666 yen, with volume of 48.7 million shares — evidence of a tug-of-war between buyers trying to catch a falling knife and sellers determined to lock in gains from the January-to-May rally that lifted the stock nearly 190%.

The fundamental backdrop remains solid but is losing momentum fast. For the fiscal year ended March 2026, Fujikura reported a 20.7% revenue increase to ¥1.182 trillion, operating profit up 39.2% to ¥188.7 billion, and net profit surging 72.5% to ¥157.2 billion. But guidance for the current year through March 2027 tells a different story: revenue is seen rising just 5.1% to ¥1.243 trillion, operating profit up 11.8% to ¥211 billion, and net profit essentially flat at ¥156 billion, a decline of 0.7%. The high base of comparison is now working against the company.

Valuation remains stretched even after the pullback. The forward price-to-earnings ratio stands at 48.55, the price-to-book ratio at 13.51, and the dividend yield at just 0.83%. With a market capitalization of roughly ¥8.1 trillion, the stock is still pricing in significant future growth. The January low of 2,742 yen is a distant memory, but the May high of 7,933 yen is now more than 70% above the current level — a measure of how much exuberance had been priced in.

Fujikura is moving ahead with the US subsidiary, Fujikura Optical Cable Systems LLC, which is expected to be registered in Delaware in June 2026. But its impact on near-term earnings will be minimal. The company is also monitoring hydrogen and other raw material availability, energy supply, and government incentives before finalizing the US site. Investors, meanwhile, are watching the June 2026 incorporation as a key milestone — but until then, the dominant narrative is the wait. And with a heap of leveraged longs on the books, that wait could get rougher before it gets better.