What changed
Fabrinet shares fell roughly 20% in Tuesday trading after the optical components manufacturer reported record fiscal fourth-quarter results but offered a first-quarter revenue outlook that implied a more modest sequential step-up than the quarter just delivered. The slide pulled the optical and connectivity complex lower, with Marvell down about 8%, Amphenol down about 7%, Coherent off about 12%, Lumentum down roughly 10% and Corning off nearly 8%.
The measured result
For the fiscal fourth quarter, Fabrinet posted revenue of $1.316 billion, up 45% year on year and above company guidance. Non-GAAP earnings came in at $4.10 per share, compared with $2.65 a year earlier, described as an all-time high. Full-year revenue reached $4.64 billion, up 36%. For the fiscal first quarter, the company guided revenue of $1.375 billion to $1.425 billion. The stock had run up roughly 14% in the week and 25% in the month ahead of the report, and the move marked Fabrinet's largest earnings-day decline in the past six quarters, about 2.2 times its typical post-earnings drop.
Added pressure on the print
Beyond the guidance, Fabrinet disclosed a $56.7 million loss on non-marketable equity securities, and capital spending pushed fiscal fourth-quarter free cash flow to negative $36.9 million. The combination turned what CEO Seamus Grady called "exceptional" results into a "good but decelerating" setup in the eyes of investors.
Competing evidence on the AI hardware sell-off
The optical and connectivity peers hit hardest on Tuesday were not all delivering weak fundamentals. Coherent and Lumentum, the reporting noted, had posted prior-quarter data center revenue growth of 59% and 109%, respectively, yet still declined sharply. The sell-off was amplified by macro pressure: Anthropic told investors its annualised revenue run-rate reached $65 billion at the end of July, below the more than $80 billion figures previously cited, and Reuters reported the company's own 2028 revenue estimate of $190 billion to $200 billion, also below some investor models. A separate Wall Street Journal report cited roughly $3 trillion in debt across nine top tech companies.
What remains uncertain
It is unclear how much of the Amphenol and Marvell declines reflected direct spillover from Fabrinet's outlook versus the broader rotation away from AI hardware names after the Anthropic data point. The earnings-day drop comparison is limited to Fabrinet's prior six quarters, and the article does not quantify the intraday contribution of each peer to the sector's losses.
Next milestone
Attention turns to Keysight Technologies' third-quarter earnings, scheduled for after the close on the same Tuesday, with shares already down about 7% ahead of the release.
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