Shares of Fabrinet (NYSE: FN) were up on Thursday. The company’s stock gained 10.8% as of the market close and was up as much as 13.4% earlier in the day. The leg up came amid broader market weakness, with the S&P 500 (SNPINDEX: ^GSPC) down 1.4% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) down 2.1%.
The company, which manufactures precision optical equipment critical to modern data centers, announced a strategic partnership with Amazon in which the tech giant will purchase Fabrinet stock.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
The company has entered an agreement that allows Amazon to purchase 381,922 ordinary shares of Fabrinet at a price of $208.48 per share. The warrant will expire on March 12, 2032. Nearly 40,000 shares have already vested, while the remainder will vest based on future payments by Amazon or its affiliates to Fabrinet.
Amazon, through its wholly owned subsidiary Amazon Web Services, is one of the largest data center operators in the world. Its servers power a large portion of the modern internet and help enable AI models, like ChatGPT.
Partnering with Amazon could propel sales growth for Fabrinet as Amazon scales its own artificial intelligence (AI) operations. Structuring the deal as it has with most of the shares vesting on future payments indicates this will be a long and fruitful relationship.
Fabrinet is in a solid financial position with minimal debt and can hopefully take greater advantage of continued AI capital expenditures from big tech companies like Amazon. With a price to earnings ratio (P/E) of 22.6, it’s reasonably priced.
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of March 10, 2025
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact legal@gsix.org
