[Spotlight] Furuya Metal (7826) surges +9.35%! What happened to the stock price following 'large-scale order observations' and a target price hike?

Industrial precious metal manufacturer Furuya Metal (7826, TSE Prime) attracted significant market attention on September 25. The stock price briefly rose more than 11% from the previous day’s closing price, and at one point, it updated its all-time high on a stock-split-adjusted basis for the first time in about two weeks. Why did such strong buying occur at this timing? In this article, we will organize, as clearly as possible, the company’s business content, the specific factors that triggered this surge, recent stock price trends, and points to watch moving forward.

■ What kind of company is Furuya Metal?

First, as a premise, let’s understand what kind of company Furuya Metal is. Headquartered in Toshima-ku, Tokyo, the company is engaged in the smelting, processing, and sales of industrial precious metal products, primarily those made from platinum group elements. It is a long-established manufacturer founded in 1951 and incorporated in 1968, and in 1981, it succeeded in manufacturing iridium crucibles for the first time in Japan. Currently listed on the TSE Prime Market, it has been selected twice, in 2014 and 2020, for the Ministry of Economy, Trade and Industry’s ‘Global Niche Top 100’ companies.

The company’s strengths lie in metals that are particularly rare and difficult to process among precious metals, such as iridium and ruthenium. Because these have extremely high melting points, are resistant to acids, and are chemically stable, they are used in a wide range of high-tech products, including thermocouples (temperature sensors) for semiconductor manufacturing equipment, sputtering targets, crucibles for single-crystal growth, automotive spark plugs, organic EL light-emitting materials, and HDD coating materials. There are only a few manufacturers in the world capable of processing iridium and ruthenium with high purity, and this high technical barrier to entry supports the company’s profitability. In addition, it possesses recycling technology that recovers precious metals from used products at a high purity of 99.999%, establishing a unique position from the perspective of resource circulation.

In terms of performance, the full-year financial results for the fiscal year ending June 2026 (July 2025 to June 2026) have already been announced, recording significant growth in both revenue and profit: sales increased 74.5% year-on-year to 100.1 billion yen, operating profit rose 160.0% to 24.8 billion yen, and net profit grew 147.9% to 16 billion yen. This is the result of three tailwinds—the expansion of data center investment, rising precious metal prices, and the weak yen—and further growth in revenue and profit is expected from the next fiscal year onward. In fact, looking at the stock price trend since the beginning of the year, it has risen from a year-to-date low of 3,510 yen on January 5, 2026, to briefly reach the 11,000 yen range in September, which calculates to more than a threefold increase year-to-date. Against the backdrop of expanding demand for semiconductor-related capital investment, it is also impossible to overlook the tailwinds from domestic advanced semiconductor investments, such as the relocation of a quartz processing plant believed to be for Rapidus’s Chitose factory in Hokkaido.

■ Why did the stock price surge on September 25?

The direct trigger for this surge was Nomura Securities raising its target price for Furuya Metal from 12,500 yen to 13,200 yen and maintaining its ‘Buy’ investment rating. While it is not uncommon for securities firms to raise target prices, the market reaction was amplified because the basis for this particular increase was very specific.

According to a report by Nomura Securities, Furuya Metal appears to have secured a large-scale order from a major US optical-related company for iridium and platinum crucibles for optical isolator applications. It is important that this order is not a one-time sale but is considered to have the potential to boost the company’s earnings scale over multiple years. In the stock market, materials that ‘last for several years’ are more highly valued than materials that are ‘only good for this term,’ which led to the significant upward revision of the target price.

Following this news, Furuya Metal stock was bought up to 11,880 yen in the morning session, up 1,180 yen (11.02%) from the previous day. Calculating from the previous day’s closing price of around 10,700 yen, this is indeed a double-digit percentage surge. With this rise, the company’s stock briefly updated its all-time high on a stock-split-adjusted basis for the first time in about two weeks. Recently, the 11,390 yen to 11,420 yen range had been recognized as the year-to-date high between September 9 and 10, but this level was easily surpassed. Updating an all-time high means that the stock market has entered a ‘price level that no one has ever seen before,’ which has the characteristic of making price movements gain momentum and making it easier for new buying to enter.

■ Why was the ‘large-scale order for optical isolators’ so highly evaluated?

Here, let’s take a step further and consider why this order observation holds such significant meaning for the market. An optical isolator is a component in the world of optical communication used to ‘allow light to pass in only one direction and block reflected light in the opposite direction.’ The heart of this component requires technology to precisely grow garnet-based crystals, and iridium and platinum, which have extremely high melting points and are chemically stable, are chosen as the materials for the crucibles used in that crystal growth.

In recent years, with the spread of generative AI, a rush of new construction and expansion of AI data centers has continued globally. The ratio of communication connecting servers inside and outside data centers using optical signals rather than electrical signals is increasing year by year, and the demand for components called optical transceivers is expanding rapidly. Optical isolators are essential components for these optical transceivers, and the structure is such that as AI investment expands, the demand for the iridium and platinum crucibles that serve as their materials increases proportionally. In other words, this order was not just a story of ‘a big order happened to come in,’ but news that confirmed Furuya Metal is in a position to supply components located at the ‘upstream’ of the massive capital investment cycle of AI data center investment, which is expected to continue for the next several years. It is believed that the market reacted more strongly than to financial indicators because this structural tailwind could be reaffirmed.

■ Strong demand for catalysts and upward revision of earnings forecasts

What Nomura Securities evaluated this time was not just the large-scale order for optical isolators. It was also pointed out that demand for electrode catalysts is strong. Furuya Metal supplies products made by processing platinum into fine wires and forming them into meshes as electrodes and industrial catalysts, and it also has a track record in fields such as cells and electrodes for salt electrolysis. It is believed that the steady demand for precious metal catalysts in chemical plants and environment-related fields, in addition to data centers and semiconductors, is a factor steadily boosting performance.

In response to demand strengthening simultaneously across these multiple business segments, Nomura Securities revised its earnings forecast upward, estimating an average annual operating profit growth rate of approximately 11% for the three years starting from the fiscal year ending June 2027. The fact that a multi-year growth rate was indicated rather than a single-year increase makes it easier for investors considering long-term holdings to make decisions. It is thought that the confirmation of two different growth drivers simultaneously—the order for optical isolators and catalyst demand—rather than just one good piece of news, led to the relatively large 700 yen increase in the target price.

■ Looking back at stock price movements

Here, I would like to organize the recent stock price trends chronologically again. Furuya Metal stock has shown very significant price movements since entering 2026. The year-to-date low was 3,510 yen on January 5, a level where market attention was not yet very high. From there, the stock price followed an upward trend as the rapid expansion of performance, the rise in precious metal prices, and expectations for AI-related demand were gradually priced in, and it briefly exceeded 10,000 yen in May.

When significant revenue and profit growth was confirmed in the financial results for the fiscal year ending June 2026 announced in August, the stock price raised its level even further. From the end of August to early September, it fluctuated between the high 8,000 yen range and around 10,000 yen, but entering September, it developed a rapid attempt to test the upside while accompanied by trading volume, and on September 9, it recorded 11,250 yen on a closing basis, and by the following day, it recorded 11,390 yen to 11,420 yen, which were the year-to-date and all-time highs. At this point, it had already recorded a staggering year-to-date increase of more than three times.

After that, the stock price entered a correction phase, and from mid-to-late September, there was a scene where it returned to around 10,700 yen. It can be said that it was a timing when the market was wary that it had ‘risen too much in the short term’ and profit-taking selling was likely to occur. However, on September 25, when Nomura Securities’ target price hike and large-scale order observations were reported, buying flooded in, completely canceling out this correction phase, and it updated its all-time high with a price movement of over 11% from the previous day. It was a surge enough to appear at the top of the price increase ranking, and trading volume is also thought to have expanded significantly more than usual.

Stock prices do not necessarily rise in a straight line when good news comes out; the magnitude of the reaction changes depending on ‘how much expectation is already priced in.’ In the case of Furuya Metal, since it is a stock that has already been bought significantly since the beginning of the year, it was a phase where it would not have been strange for the reaction to be dull due to the news being fully priced in. Nevertheless, the double-digit percentage rise is likely a manifestation of the fact that this material was accepted not as a ‘temporary fluctuation in performance’ but as ‘proof of multi-year earnings growth.’ In the stock market, the higher the expectations for a stock, the duller the reaction to ‘decently good’ news, and conversely, stock prices tend to jump significantly when ‘better-than-expected and sustainable’ news comes out. It can be said that Furuya Metal this time fits exactly this pattern.

As of September 25, the market capitalization is approximately 276 billion yen, the PBR (price-to-book ratio) is 3.41 times, and the next fiscal year’s projected ROE (return on equity) is around 22.60%. While some may point out a sense of overvaluation looking only at the PBR level, it is also possible to view that it is not strange for a certain premium to be attached to a company with such high growth and profitability.

■ Future points of attention and risks

There are several points to keep an eye on when predicting future stock prices.

First, the next financial results announcement is scheduled for around early November 2026, and the focus will be on how much the large-scale order for optical isolators and the strength of catalyst demand are actually reflected in sales and profit. The expressions ‘appears to’ and ‘observations’ by securities firms do not go beyond market speculation, and how much it is backed by official financial results will determine the next direction of the stock price.

Second is the risk of fluctuations in precious metal prices. Furuya Metal’s performance has a structure that is influenced to a certain extent by the market prices of precious metals such as iridium, platinum, and ruthenium. While rising precious metal prices work positively for performance through inventory valuation gains and higher selling prices, the opposite effect is also expected if prices fall back. In addition, trends in foreign exchange (weak yen/strong yen) are also variables that cannot be ignored for the company, which has a high export ratio.

Third is the sustainability of the AI data center investment theme itself. Since the current overall market is in a phase where expectations for the expansion of generative AI-related capital investment are strongly priced in, if there were to be observations of a slowdown in the pace of AI-related investment, it could affect stocks located upstream in the supply chain like Furuya Metal. Conversely, the view of the bulls is that as long as the AI investment trend continues, demand for optical isolators is likely to remain firm.

Fourth is the ease of fluctuation in supply and demand due to the fact that the stock price has already achieved a large rise of several times year-to-date. Stocks that have risen rapidly tend to have volatile short-term price movements due to profit-taking selling from a sense of the news being fully priced in, or selling to clear margin buying balances. Even if it looks like a good opportunity for investors betting on a medium-to-long-term growth story, it is worth keeping in mind that for investors aiming for short-term trading, the volatility of the price movement itself can be a risk.

■ Summary

Furuya Metal’s stock price surge on September 25 was not mere speculative buying, but was due to the overlap of materials that could boost performance over multiple years: specific large-scale order observations by Nomura Securities (order for iridium/platinum crucibles for optical isolators from a major US optical company) and strong demand for electrode catalysts. With the target price raised from 12,500 yen to 13,200 yen and an average annual operating profit growth rate of about 11% expected for the three years starting from the fiscal year ending June 2027, the market evaluated it as a ‘sustainable growth story’ rather than ‘temporary good news,’ and the stock price updated its all-time high with a significant gain of over 11% from the previous day.

Having already achieved a staggering stock price increase of more than three times year-to-date, it is a phase where adjustments due to the news being fully priced in are easily conscious in the short term. However, for Furuya Metal, which is located upstream in the growth market of optical communication components for AI data centers and has multiple business pillars of semiconductors, catalysts, and recycling, this news can be said to be material that reinforces the medium-to-long-term growth scenario. How much this order observation is backed up by numbers in the next financial results announcement in early November seems to be an important touchstone for predicting the next stock price trend.