Goldman Sachs analyst Ryo Harada upgraded the rating on Furukawa Electric Co to a Hold yesterday, setting a price target of Yen7,900.00.
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Ryo Harada has given his Hold rating due to a combination of factors influencing Furukawa Electric Co. The company has been upgraded from a previous Sell rating to Neutral, reflecting a more optimistic outlook on its potential for marginal profit growth. This change is largely driven by the increasing demand for optical products, which are essential for generative AI and data centers, areas where Furukawa Electric is expected to benefit.
Despite initial concerns about a potential slowdown in demand following the emergence of DeepSeek, the actual market demand has surpassed supply, prompting companies to invest in expanding their capacities. The ongoing investments in data center construction, fueled by the rise of AI applications and projects like the Stargate Project, suggest a sustained demand for optical products. These factors, combined with technological advancements requiring medium-distance data center connections and higher speeds for intra-data center communications, contribute to the Hold rating as Furukawa Electric is positioned to capitalize on these industry trends.
FUWAF’s price has also changed slightly for the past six months – from $46.140 to $50.640, which is a 9.75% increase.