Markets
markets
Luke Kawa
8/19/25

Fabrinet tanks after warning of supply chain issues in its Nvidia-linked business

Fabrinet, a maker of optical communication devices with many use cases (including in AI data centers!), is tumbling after management said that sales in its data communication business are expected to fall in the current quarter.

The warning came after Fabrinet delivered its Q4 report, with financials for the three months ended June 27 that were just peachy: both adjusted earnings per share and revenues exceeded analysts’ expectations.

The company counts Nvidia and Cisco as major customers and Amazon as a future big buyer (and also a warrant holder with significant equity exposure).

During the conference call following the release of earnings, Chief Financial Officer Csaba Sverha cited supply constraints as the cause of the anticipated drop-off in revenues for this segment:

“In Datacom, we are excited to see growing demand, especially for next-generation products. However, the surging demand has resulted in near-term supply constraints for some critical components, and as a result, we expect to see a sequential dip in Datacom revenue in Q1. We are working with our customer and suppliers to resolve these supply issues, which we expect to be temporary.”

Those “next-generation products” refer to Nvidia’s transition to 1.6-terabit networking technology.

CEO Seamus Grady later offered more detail, saying:

“We’re pretty confident we’re pursuing multiple paths with our customer and with the supply base to help remedy the constraints in order to meet the strong demand, and we believe the supply issues will be temporary. But they will take a little bit of time to fully resolve, maybe one or two quarters, but we do think it’s a short-lived problem. But it’s one we have to deal with right now.”

Even with these challenges, management still offered first-quarter guidance for adjusted earnings per share and sales that were ahead of what the Street had penciled in, but that’s of little solace to any shareholders today.

More Markets

See all Markets
Nia Warfield, Luke Kawa
4h
S&P 500 closes at record as tech heavyweights flex (besides Apple)

The Magnificent 7 did the heavy lifting, performing better than any S&P 500 sector ETF on Tuesday.

Bull by the horns
markets
Matt Phillips
5h

Oracle rips as backlog builds, but company misses on top and bottom lines

Oracle shares shot higher after-hours as the company reported a growing backlog, even though its fiscal Q1 results fell slightly short of expectations. The company reported:

  • Adjusted earnings per share of $1.47 vs. expectations of $1.48.

  • Revenue of $14.93 billion vs. expectations of $15.04 billion.

Shares were up 21% in after-hours trading, which is a pretty crazy stock move for a company with a market cap of more than $675 billion.

The market was likely impressed by a giant build in the company’s “remaining performance obligations,” or RPO, which is how the company measures the value of signed cloud computing deals that haven’t yet been reported as revenue. In a statement, CEO Safra Catz said: 

“We signed four multi-billion-dollar contracts with three different customers in Q1. This resulted in RPO contract backlog increasing 359% to $455 billion. It was an astonishing quarter — and demand for Oracle Cloud Infrastructure continues to build. Over the next few months, we expect to sign-up several additional multi-billion-dollar customers and RPO is likely to exceed half-a-trillion dollars.”

Oracle Announces Fiscal Year 2026 First Quarter Financial Results

Oracle Announces Fiscal Year 2026 First Quarter Financial Results

The market was likely impressed by a giant build in the company’s “remaining performance obligations,” or RPO, which is how the company measures the value of signed cloud computing deals that haven’t yet been reported as revenue. In a statement, CEO Safra Catz said: 

“We signed four multi-billion-dollar contracts with three different customers in Q1. This resulted in RPO contract backlog increasing 359% to $455 billion. It was an astonishing quarter — and demand for Oracle Cloud Infrastructure continues to build. Over the next few months, we expect to sign-up several additional multi-billion-dollar customers and RPO is likely to exceed half-a-trillion dollars.”

markets
Matt Phillips
5h

Robinhood rides index inclusion rally to record close

Robinhood Markets notched a new closing high Tuesday, as the crypto, stock, and options brokerage continued to ride a rally set off by the announcement that it would be added to the S&P 500 Index.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

Robinhood appears to be benefiting from the so-called inclusion effect, a market phenomenon where companies that are added to major market indexes can see a price move as index funds — whose holdings must mirror the membership of the index — rush to buy the stock.

For what it’s worth, it seems like Robinhood will upon entry (effective prior to the market open on September 22) be the top-performing member of the index, as its roughly 220% gain this year is more or less double that of the current leader, Seagate Technology Holdings.

markets
Luke Kawa
5h

GameStop posts impressive Q2 results with big sales beat

Don’t call it a comeback!

GameStop is jumping aftermarket as the video games and collectibles retailer posted an impressive set of second-quarter results.

  • Net sales: $972 million (estimate $823 million).

  • Adjusted diluted earnings per share: $0.25 (estimate $0.16).

Note: these consensus estimates, compiled by Bloomberg, are from only two analysts.

The sales beat is particularly noteworthy, as the company had already done an exemplary job of expense control to help protect its bottom line. Revenues were up more than 20% versus the year-ago quarter, the biggest annual jump in sales since the company (and the world) was emerging from the pandemic in 2021.

The options market implies a move of plus or minus about 9.4% on earnings.

For a while, GameStop’s ability to generate positive net income was purely a function of the interest earnings on its substantial cash hoard. But now, GameStop has strung together five consecutive quarters of positive operating cash flows for the first time in its history!

This was the quarter when the company began to act on its bitcoin treasury strategy, raising money through the sale of convertible notes and using some proceeds to purchase the crypto asset.

Because of how much market value has been ascribed to potential for GameStop CEO Ryan Cohen to use its significant cash holdings to transform the company, the prospect of converting cash into bitcoin initially did not sit too well with investors following the announcement of this new strategic push in March.

Shares of the once-upon-a-time meme stock really didn’t get too much love during retail frenzies earlier in the summer, and were down about 25% year to date heading into this release.

As of the close of the quarter, its bitcoin holdings were valued at $528.6 million.

Western Digital Seagate Technology Rise to top of S&P 500

Data storage is so hot right now

A rapid turnaround in profitability helps explain how Seagate Technology and Western Digital have clawed to the top of the S&P 500 this year.

Matt Phillips8h

Latest Stories

Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, or Robinhood Money, LLC.
©2025 Sherwood Media, LLC