Japanese cable maker Fujikura expects shares to rise 400% thanks to artificial intelligence-driven fiber demand

In context: Having barely emerged from the pandemic in 2020, Fujikura is now enjoying a period of unprecedented growth in the Japanese stock market, driven by demand for artificial intelligence and data center operations. The Tokyo-based company specializes in electrical equipment, including power and telecommunications systems, fiber optic devices and more.

Fujikura Ltd., founded by Zenpachi Fujikura in 1885, continues to thrive thanks to the rapid growth of artificial intelligence products and research initiatives. Initially focused on the production of silk and cotton insulated wires, the company subsequently specialized in advanced cabling systems for the modern technology industry.

Fujikura has become the top-performing stock in the Nikkei 225 Stock Average, with its share price up more than 400 percent in 2024, according to a recent Bloomberg report. The company is also set to join the widely popular MSCI Global Stock Market Index.

One of Fujikura’s most sought-after products is its ultra-thin fiber optic cables, which have one of the smallest diameters in the industry. According to CFO Kazuhito Iijima, these cables can be installed in confined spaces without the need for additional tunnels. Notably, Apple is one of Fujikura’s largest clients.

Iijima noted that demand for data center products began to rise significantly around 2022, which initially puzzled company executives. It is now clear that artificial intelligence is the main driving force behind thriving businesses. Fujikura is expected to reach 104 billion yen ($674 million) in operating profit for the current fiscal year, up 17 percent from last year.

A significant 70 percent of Fujikura’s revenue comes from outside Japan, and 38 percent from the United States. In 2020, the company suffered its first losses in a decade due to the Covid-19 pandemic and escalating trade tensions between the US and China. The return of the Trump administration could reignite these problems, but Fujikura is preparing for such scenarios.

To mitigate risks, Iijima confirmed that the company has set up a manufacturing facility in the United States dedicated to producing high-density fiber optic cables. The plant is designed to comply with the Build America, Buy America Act, ensuring sustainability “even if new problems arise that are unfavorable for imported materials,” Iijima said.

Looking to the future, Fujikura is preparing for new opportunities as global data center capacity is projected to grow 33 percent annually through 2030, according to McKinsey & Company. The company is also exploring future markets, with fusion reactors (a potential clean energy breakthrough) seen as a promising avenue that will likely require extensive cabling solutions.