[Weekly Stock Picks] Fujikura (5803) Rebounds on the AI Boom & Netflix (NFLX) Sinks After Earnings – One Stock Each From Japan and the U.S.

Hey everyone, Hirokichi here.

This is the second installment of my “Weekly Stock Picks” series. This week I’m covering Fujikura (5803), a Japanese fiber-optic and cable maker, and Netflix (NFLX), the U.S. streaming giant. Both stocks have seen big swings recently, and there’s a lot for investors to think about. Let’s dig in.

Fujikura (5803): Riding the AI Boom to Record Profits

Fujikura is a Tokyo Stock Exchange Prime-listed company whose roots go back to cables and fiber optics. Lately it’s been getting attention as an “AI infrastructure” play, thanks to the explosive growth in data center investment driven by generative AI.

For the fiscal year ended March 2026, Fujikura’s consolidated revenue rose 20.7% year over year to 1,182.4 billion yen, topping the 1 trillion yen mark for the first time in the company’s history. Operating profit climbed 39.2% to 188.7 billion yen, and net profit jumped 45% to 132.0 billion yen, a record for the fifth straight year (based on reporting from Nikkei and other Japanese financial media).

The engine behind this growth is the company’s information and communications segment. Demand for data-center-grade optical fiber, especially from North America, has exploded, pushing segment revenue up 44.7% to 653.0 billion yen and segment operating profit up 65.7% to 152.7 billion yen. That segment alone now accounts for more than 80% of Fujikura’s total operating profit, at this point, “AI infrastructure company” might be a more accurate label than “cable maker.”

Lined up like this, you can see revenue, operating profit, and net profit all grew sharply versus the prior year. Notably, the operating profit growth rate (+39.2%) is close to the net profit growth rate (+45%), which suggests the core business itself is getting genuinely more profitable, not just benefiting from one-off items.

On top of that, the new mid-term plan announced on May 19 targets 1.6 trillion yen in revenue and 315.0 billion yen in operating profit by fiscal 2028. The company plans up to 300 billion yen in strategic growth investment across Japan and the U.S., aiming to roughly quadruple production capacity versus fiscal 2022. It’s an aggressive target, but it shows just how confident management is in continued AI data center demand.

Why Has the Stock Been So Volatile? From a Sharp Rally to This Week’s Rebound

Fujikura’s stock has swung wildly over the past few months, arguably some of the most extreme price action of any stock in the AI trade. Some background first: in an earlier quarter, despite posting record profit, the stock actually hit its daily limit-down because the full-year outlook fell short of what the market was hoping for.

Then on June 19, Fujikura sharply raised its earnings guidance for the fiscal year ending March 2027, lifting its net profit forecast by 46% year over year. Shares surged to a limit-up bid, driven by unexpectedly large orders from hyperscalers (major cloud providers) and price increases on its products.

That said, the stock couldn’t escape the broader market downturn that followed. On July 17, the Nikkei 225 plunged 2,694 yen to close at 64,141 (driven by a broad sell-off in AI chip-related stocks), and Fujikura fell along with it to 4,472 yen that day.

Today, July 21, the Nikkei is rebounding, up roughly 800 points, helped by strength in U.S. semiconductor stocks, and Fujikura has bounced back too, up 349 yen (+7.75%) to 4,850 yen. Note that as of July 16, the average analyst price target stood at 6,968 yen, still well above the current level.

An Investor’s Take on Fujikura: The Good and the Cautions

On the positive side, Fujikura is riding a structural tailwind from AI data center demand for optical fiber, has posted record profit for five straight years, has set ambitious growth targets in its mid-term plan, and carries an average analyst price target above the current share price.

On the cautious side, the stock’s price action is extremely volatile, it has hit both limit-up and limit-down within a short span, meaning sentiment can swing hard around every earnings report or guidance update. There’s also the risk that heavy near-term capital spending squeezes profitability temporarily, and the fact that growth is heavily concentrated in North American hyperscaler capex (a concentration risk tied to a handful of customers and one region). Given the sharp rebound already seen today, chasing the stock at these levels calls for some caution.

Netflix (NFLX): Revenue and Earnings Both Grew, So Why Did the Stock Crash?

Next up from the U.S. side is Netflix, the world’s largest streaming service, listed on the Nasdaq. Given how many subscribers it has in Japan too, it’s a familiar name for a lot of readers.

In its second-quarter 2026 results, Netflix reported revenue of $12.56 billion, up 13% year over year, net income of $3.40 billion, and EPS (earnings per share) of $0.80, slightly ahead of the $0.79 analyst consensus. On the surface, that’s a beat-and-raise-looking quarter.

As the chart shows, revenue grew steadily from $11.12 billion a year earlier to $12.56 billion this quarter. And yet, the stock fell 8.58% in after-hours trading right after the report, then dropped roughly another 8% the following trading day, a genuinely rough stretch (based on reporting from CNBC, Yahoo Finance, and others).

Two main factors drove the sell-off. First, Netflix guided for Q3 revenue growth to slow to around 12%, and narrowed its full-year revenue guidance to a range of $51.0-51.4 billion (down from a previous range of $50.7-51.7 billion). Second, the company announced it will cut back how often it discloses viewing-hours data, moving from quarterly to just once a year. That raised investor concerns about reduced transparency, and several analysts cut their price targets in response.

An Investor’s Take on Netflix: The Good and the Cautions

On the positive side, both revenue and EPS continue to grow steadily year over year, the company’s global subscriber base and content production strength remain solid, and analyst sentiment is still broadly bullish, the average 12-month price target ($98.16) sits well above the current share price. Some investors see the sharp pullback from the 52-week high of $126.71 as a long-term buying opportunity.

On the cautious side, there are clear signals of slowing growth, and the reduced disclosure has dented investor trust. The stock is already down more than 40% from its 52-week high, so it will likely take some time to confirm a trend reversal. Room for further price increases also looks limited given how competitive the streaming market has become.

What to Watch This Week

(1) Fujikura’s price action is likely to stay volatile depending on overall sentiment in both the Japanese and U.S. markets, expect sharp reactions to any AI data center investment headlines.

(2) With Netflix disclosing less viewing data going forward, news about hit content and subscription price changes will likely become more important signals for investors trying to gauge the business.

(3) More broadly, we’re right in the middle of earnings season, a period when individual stocks tend to see heightened volatility, worth keeping position sizes in mind.

Let’s keep at it, slow and steady. See you next time!

* This article is for informational purposes only and does not recommend any specific investment. Please make investment decisions at your own responsibility.

日本語版はこちら → 今週の注目株（日本語版）

Check out last week’s “Weekly Stock Picks” (West HD (1407) Hits Limit-Up & Apple (AAPL) at a Record $327, One Stock Each From Japan and the U.S.) as well. If you want to learn more about AI data center stocks, take a look at Why Data Centers Are the Beating Heart of the AI Era, 8 Notable Japanese and U.S. Stocks to Watch.

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