Fabrinet (FN) shares experienced a significant pre-market plummet of nearly 10% on Tuesday, despite the company delivering a beat-and-raise performance in its fiscal second quarter of 2025. The sharp decline came as Barclays lowered its price target on the stock from $292 to $245, citing concerns over weakness in Fabrinet's datacom segment.

The optoelectronic components maker reported adjusted earnings per share of $2.61 for Q2, exceeding the consensus estimate of $2.50. Revenue rose 17% year-over-year to $833.6 million, surpassing forecasts of $813.86 million. However, the company's datacom segment declined 9% due to a delayed ramp-up of new transceivers for Nvidia's Blackwell platform.

While Fabrinet's telecom segment saw robust growth of 24% year-over-year, driving nearly all of the company's overall revenue increase, the weakness in datacom weighed on investor sentiment. In contrast, Needham analysts maintained a Buy rating and a $280 price target on Fabrinet, citing "expected continued strength in Telecom" and the company's plans for a significant capacity expansion.