Fujikura Stock Crashes 44% in One Month Despite Record Earnings

Fujikura’s 5803.T stock fell from a peak of ¥6,000 in April to ¥4,256 by June 15, a 44% decline in just two months. The company reported record earnings with sales up 20.7% to ¥11,824 billion and operating profit surging 39.2% to ¥1,887 billion for the fiscal year ending March 2026. Yet the market sold aggressively. This disconnect reveals a structural correction where future growth expectations have been fully priced in, leaving no room for positive surprises.

Why Record Profits Failed to Support the Stock

Fujikura’s business fundamentals remain strong. Net profit jumped 72.5% year-over-year to ¥1,572 billion, and earnings per share nearly tripled to ¥94.93. The company’s return on equity improved to 32.5% from 24.4%, and debt fell sharply from ¥1,471 billion to ¥850 billion. AI and data center demand for optical fiber cables remains robust, with the company’s information technology division operating profit surging 1.7x. Yet Meyka rates the stock B+, with a price-to-earnings ratio of 44.87x and price-to-book ratio of 12.57x, both historically extreme for Fujikura. The market had already priced in years of future growth before earnings were announced.

The Valuation Wall: When Expectations Become the Problem

Fujikura’s mid-term management plan outlined large-scale capital investments in optical fiber production and data center infrastructure. Rather than spark buying, the announcement triggered selling. The reason: investors saw the plan as confirmation of goals already embedded in the stock price, not as new upside. At ¥4,256, the stock trades at 45x forward earnings based on the company’s 2027 guidance of ¥12,430 billion in sales and ¥2,110 billion in operating profit. Analysts at firms tracking the stock see limited room for expansion from current levels, with neutral ratings dominating consensus.

A Broader Market Rotation Away From AI Beneficiaries

Fujikura’s collapse is part of a wider structural shift. Research analyst Jordi Visser documented a secular rotation away from hyperscalers toward suppliers of AI infrastructure, yet even this trade is facing headwinds as the market reassesses valuations. The hyperscaler-to-S&P 500 relative ratio fell 4% weekly for two consecutive weeks, a move unseen in three years. Fujikura, despite being a receiver of AI spending, has not been immune to profit-taking as investors lock in gains from the initial AI boom.

What the Technical Picture Shows

Fujikura’s technical indicators confirm weakness. The relative strength index (RSI) sits at 39.65, signaling oversold conditions but not yet a reversal. The stock trades ¥1,120 below its 50-day moving average of ¥5,480 and ¥2,143 below its 200-day average of ¥3,789.65. Volume remains elevated at 45.5 million shares traded daily versus a 63-million average, suggesting institutional liquidation. The stock’s 52-week range spans ¥1,099 to ¥7,933, with the current price near the midpoint of the recent collapse.

Final Thoughts

Fujikura’s earnings remain strong, but Meyka’s B+ rating reflects a stock priced for perfection at 44.87x earnings. The 44% decline signals a market correction of inflated expectations, not a business failure. Investors should wait for valuation compression before re-entering.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.