First Take: FN (-5.4%)...: US Hardware / Semiconductors Sector Specialist Commentary Hardware • Semiconductors

Research evidence excerpt

Specialist Sales

JPMORGAN

17 August 2026

First Take: FN (-5.4%)...

Joshua Meyers

FN gave us a solid print and a healthy guide on seemingly de-risked expectations.

4Q26 Revenue was $1.316b (v. $1.27b Guide & Bberg); GM in-line with expectations at 12.2%; EPS $4.1 (v. $3.80 Guide; $3.78

BBerg).

The 1Q27 Revenue Guide was $1.4b (v. $1.33b Bberg) and 1Q27 EPS $4.18 (v. $4 Bberg).

UNFORTUNATELY, Optical Communications up +7.6%QoQ, +39%YoY was driven very largely by DCI +30%QoQ. This is a

solid datapoint for Nokia & CIEN, but is also consistent with what we already knew. The HF KPI was Datacom, where we were

DOWN on the quarter... This needed to be up.

SIMILARLY, on non-optical: Auto up +17.1% tracks with what we've heard elsewhere; but unfortunately HPC (+10.6% to $118)

was good but not good enough... Sounds like ppl wanted $125.

Bottom-line this was exactly what Joe Cardoso warned us about: a totally fine quarter that LO investors will shrug off, but one

where the company missed HF KPIs. It helps that positioning was quite neutral, but some of that was covering over the past few

weeks, so there's potential for folks to press shorts for a while longer now. If Seamus can convince investors on the call just how

strong C2H is going to be, we could end the day better; but if not, this is once again the waiting game (until the October-Q) Joe

warned us about.

Call starting now. Appreciate your feedback/pushback, always!

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