Fujikura has benefited from the surging demand for data centers. On Nov. 25, the company will be added to the MSCI global indexes.
The MSCI Global Indexes, used by investors to benchmark and allocate trillions in global assets, spotlight companies like Fujikura as key players in emerging and developed markets, driving increased visibility and investment. Fujikura Ltd., a Japanese wire cabling firm, has skyrocketed as a top performer on the Nikkei 225, with shares up over 400% in 2024. Riding the AI infrastructure boom, Fujikura is expanding production of fiber optic cables, particularly for data centers—a sector projected to grow 33% annually through 2030. The company’s high-density cables, manufactured in the U.S. to comply with regulations like the Build America, Buy America Act, ensure resilience against geopolitical tensions and tariffs by meeting domestic sourcing requirements. While analysts are bullish, some suggest competitors like Sumitomo Electric may offer better value. Beyond AI, Fujikura is eyeing nuclear fusion as its next growth opportunity, anticipating its role in a future clean-energy revolution.
My Take
Fujikura exemplifies how “picks and shovels” investments benefit from transformative industries like AI. These investments focus on the essential infrastructure and tools, like Fujikura’s fiber optic cables for AI data centers, enabling industry growth without direct exposure to its risks. The company’s strategic pivot to meet AI-driven demand while safeguarding its U.S. market share through compliance is a blueprint for navigating global shifts. This underscores how infrastructure is crucial in AI and emerging energy technologies like nuclear fusion, enabling long-term growth.
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Credit: Bloomberg