B. Riley downgraded Fabrinet (FN) to Sell from Neutral with a price target of $178, down from $194. The analyst believes the trend of unbundling Nvidia’s (NVDA) GPU platforms will adversely impact Fabrinet’s optics business. Amazon (AMZN), Microsoft (MSFT), and Meta (META) have been buying Nvidia’s GPU platforms, such as HGX H100, that contain other components, including optics, the analyst tells investors in a research note. However, Riley’s latest checks indicate Amazon is about to change its purchasing model to buy just Nvidia’s GPUs, and make their own platforms. This won’t impact Nvidia’s GPU business, but will impact Nvidia’s optics business since it is about to lose one a major customer in Amazon, contends Riley. The firm says this unbundling trend could threaten Fabrinet’s optics business, since it is “just a matter of time before” Microsoft and Meta follow Amazon’s footsteps.

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