We recently compiled a list of the 15 AI Stocks That Are Dominating Headlines. In this article, we are going to take a look at where Fabrinet (NYSE:FN) stands against the other AI stocks that are dominating headlines.

The European Union recently released the initial draft for the general-purpose AI code of practice under the AI Act, its comprehensive framework aimed at regulating artificial intelligence. This section of the AI Act, which became law earlier this year, specifically addresses general-purpose AI model providers, setting out standards and practices they must follow to ensure responsible AI development and deployment. Some of the AI models that will be impacted by regulations drafted as discussions on this draft progress include GPT models by OpenAI and Claude by Anthropic, among others.

Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.

Meanwhile, London-based AI startup Tessl recently raised more than $125 million in a funding round led by prominent venture capital firms like Index Ventures, Accel, GV, and Boldstart. According to a report by TechCrunch, this has pushed the valuation of the startup to more than $500 million. The startup is building an AI native platform that developers and their teams can use to create and maintain software. The firm is still developing the product and plans to launch it in the open market by sometime next year. The basic idea behind the business is to help write code to match specifications set by developers and their teams, in natural language or code.

Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.

For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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

Fabrinet (NYSE:FN)

Market Capitalization: $9 Billion 

Fabrinet (NYSE:FN) offers optical packaging, along with precision optical, electro-mechanical, and electronic manufacturing services. The company produces fiber-optic cables that power telecommunications, AI data centers, and the global Internet infrastructure. Needham recently assumed coverage of the stock with a Buy rating and $280 price target. The company reported a surprisingly broad-based strong fiscal Q1, with low-speed Datacom carrying growth again as high-speed remained stalled ahead of the expected transition to 1.6T transceivers for Nvidia's Blackwell, the advisory told investors in a research note. The firm says the addition of artificial intelligence-related demand selling into the heart of the AI clusters adds a whole new dimension to Fabrinet's opportunity.