Fabrinet stock lags AI peers despite strong growth and a bullish $760 price target.

Fabrinet, a key supplier in the AI and data center sector, has seen its stock rise only 0.7% year-to-date, underperforming other AI-related stocks. Despite this, strong return on invested capital (ROIC) in the mid-30s to low-40s and growth in optical communications support a positive outlook. Analysts expect Fabrinet to beat Q4 revenue estimates with $1.31 billion and adjusted EPS of $4.02, projecting a 57% upside to a $760 price target based on 2027 earnings. This valuation is justified by Fabrinet's superior growth and capital efficiency compared to peers.