The global AI buildout has renewed attention on the digital infrastructure companies enabling modern data networks. Fabrinet FN and Fastly FSLY are both integral to this layer, operating across different but closely linked parts of the data transmission and delivery stack.
Fabrinet enables high-speed data transfer through precision optical networking hardware, while Fastly accelerates and secures data delivery through its edge cloud platform. Both are tied to the same underlying demand driver: rising data intensity, low-latency requirements and the scaling of AI-driven workloads across global networks. This shared exposure to data movement and delivery makes them worth comparing at this stage of the infrastructure cycle. Let's delve deep to determine which stock offers a greater upside.
The Case for FN
Fabrinet's model has been anchored in enabling the physical layer of high-speed data transmission, making it a critical enabler of the same traffic growth that Fastly monetizes. Its exposure to optical communications, datacom interconnects, and high-performance computing has positioned it directly within the infrastructure buildout cycle supporting AI and hyperscale demand.
Telecom and datacom segments have seen meaningful volume expansion, with data center interconnect activity emerging as a key catalyst as hyperscalers accelerate capacity investment. High-performance computing programs have also broadened as a revenue stream, reflecting growing customer engagement at the hardware manufacturing level. In the second quarter of fiscal year 2026, revenues reached a record $1.13 billion, growing 36% year over year.
The model is reinforced by extended hardware qualification cycles and stringent technical requirements, which limit displacement risk once embedded within customer supply chains. This results in a structurally more predictable demand profile, with revenue visibility supported by program-level commitments rather than traffic variability typically seen in consumption-based platforms.
Ongoing capacity expansion and investment in next-generation optical manufacturing have been aligned with anticipated growth in global networking demand, supporting continued scale and operating leverage.
The Zacks Consensus Estimate for Fabrinet’s third quarter 2026 EPS is pegged at $3.58, up 42.06% year over year.
Fabrinet Price and Consensus
Fabrinet price-consensus-chart | Fabrinet Quote
The Case for FSLY
Fastly’s model has been built around accelerating and securing data delivery at the edge, positioning it to benefit from the same underlying data traffic growth that drives demand for optical infrastructure. Its platform is designed to handle latency-sensitive workloads, API traffic and real-time applications, aligning with the increasing complexity of modern internet architecture shaped by AI and distributed computing.
Network services have continued to see steady demand, supported by higher traffic volumes and increased enterprise adoption. The expansion of its security and compute offerings has broadened the platform's addressable opportunity, enabling greater cross-sell engagement and deeper enterprise relationships. In the fourth quarter of 2025, revenues reached $172.6 million, reflecting 23% year-over-year growth, driven by balanced performance across customer segments and product lines.
The platform has been evolving toward a multi-product model, with API-related offerings gaining traction alongside core delivery services, contributing to improved retention and revenue expansion dynamics. Remaining performance obligations grew 55% year over year in the fourth quarter, reflecting strengthening customer commitment.
However, the consumption-based nature of the model continues to introduce variability, as revenue remains linked to customer traffic patterns and usage trends. While profitability has improved, supported by gross margin expansion and operating leverage, growth visibility remains influenced by demand fluctuations and broader macroeconomic conditions.
The Zacks Consensus Estimate for Fastly’s first-quarter 2026 EPS is pegged at 8 cents, up 260% year over year.
Fastly, Inc. Price and Consensus
Fastly, Inc. price-consensus-chart | Fastly, Inc. Quote
Price Performance and Valuation of FN and FSLY
Year to date, Fastly shares have surged 153.4% against Fabrinet's modest 50.4% appreciation, a divergence driven by improving sentiment following Fastly’s recent profitability inflection. Fabrinet's more measured gain, however, has been driven by a more durable fundamental backdrop comprising structural supply chain integration, program-driven revenue visibility and consistent earnings expansion tied to the AI infrastructure buildout cycle.
FN vs. FSLY Price Performance
Image Source: Zacks Investment Research
On a forward price-to-sales basis, FSLY trades at 5.48x versus FN's 4.51x. Fastly's premium to Fabrinet is difficult to justify given FN's superior revenue growth, more predictable demand dynamics and deeper structural positioning within the AI infrastructure cycle.
FN vs FSLY Valuation
Image Source: Zacks Investment Research
Conclusion
While both Fabrinet and Fastly are positioned to benefit from the ongoing AI-driven expansion in digital infrastructure, Fabrinet’s growth profile appears more fundamentally grounded at this stage. Fastly offers upside through improving platform adoption and profitability, but its consumption-based model continues to carry variability in demand visibility. Fabrinet, in contrast, benefits from structural supply chain integration, program-driven revenue visibility, sustained earnings expansion and a more attractive valuation relative to its growth prospects.
Hence, Fabrinet, which sports a Zacks Rank #1 (Strong Buy), makes for a better investment choice compared with Fastly, which has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).