We recently compiled a list of the 10 Stocks Hurting From DeepSeek AI News That Could Turn Into Multibaggers. In this article, we are going to take a look at where Fabrinet (NYSE:FN) stands against the other stocks.

US semiconductor stocks are getting hammered after the Chinese launched an AI model that has many questioning United States dominance in the AI space. China is currently facing restrictions on importing state-of-the-art semiconductor equipment needed for AI training. The launch of DeepSeek AI despite these restrictions is an eye-opener for Western tech companies, and the investor sentiment is reflecting it.

As market participants scamper to gather more information on China’s progress, we decided to look at stocks that are not only taking a hit from this news but also provide an attractive buy-the-dip opportunity. Against the backdrop of Project Stargate, a US government initiative to pump private sector investments into AI infrastructure, these companies also offer a potential multi-bagger opportunity.

Usually, it is the low market cap companies that become multibaggers. However, the failure rate when betting on these companies is quite high. We therefore chose companies with a market cap between $10 and $25 billion. In this way, our list contains businesses that are already established and will thrive on the boost provided by Project Stargate while successfully managing any headwinds. We believe the downside to these stocks is minimal because of the already sound fundamentals of these companies.

An automated assembly line displaying the advanced packaging technology used by the company.

Fabrinet (NYSE:FN)

Fabrinet is a critical component of the semiconductor manufacturing supply chain. The company makes advanced optical products for the industry in addition to electro-mechanical like modulators and switches among others. Currently, the stock is trading down 17%.

The company’s recent success has come on the bank of Nvidia’s success in AI, as the firm makes certain optical cables for the GPU maker. This partnership is expected to drive future growth as well. The management’s confidence can be judged by the fact that it is about to break ground on its 10th building, which is twice the size of the one they are building at the moment. This shouldn’t concern investors as the management has a sound strategy for expansion, not starting a new project until the previous one is at more than half the capacity.

Apart from the above, the company continues to buy back stock, has decent cash flow to fund expansion, and is debt-free! If Project Stargate goes ahead, Fabrinet could be a massive beneficiary.

Overall FN ranks 8th on our list of the stocks that are hurting from DeepSeek AI news that could turn into multibaggers. While we acknowledge the potential of FN as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as FN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

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Disclosure: None. This article was originally published at Insider Monkey.