Fujikura is on a track to beat its outlook thanks to sustained demand for fiber-optic cables essential for AI data centers and a plan to raise prices, according to its top executive.

The Tokyo-based company, whose disappointing forecast triggered a broad selloff of Japanese tech stocks last month, is fielding orders from almost all U.S. hyperscalers for fiber-optic cables, CEO Naoki Okada said. That’s keeping supplies tight and prompting some customers to agree to higher prices for Fujikura’s topline products, he said.

“We supply a valuable product,” Okada said in an interview, adding that the company can offset constraints on production capacity with higher unit prices. “We will raise prices a little more.”

Because artificial intelligence services require so much data, an AI data center needs far more fiber-optic cable — tiny glass strands that transmit data via pulses of light — than a conventional cloud facility. A rush to build out AI data centers has buoyed shares of Fujikura and other cable makers, such as Sumitomo Electric Industries and Furukawa Electric. Corning signed a $6 billion supply agreement with Meta Platforms and a $500 million stock deal with Nvidia.

If Fujikura’s price hikes and expansion of its other operations in optical components go through as planned, “the results will be very positive,” Okada said. For the current quarter, business is strong, he said. “I think we will beat our planned targets.”

Shares of Fujikura are down more than 40% after hitting a record high in May. Concerns about production capacity bottlenecks, growing competition and supply chain disruptions surged after the company announced annual and three-year profit outlooks that fell far below the average of analyst estimates.

“We always set a conservative forecast,” Okada said, adding that the company has factored in worst-case scenarios such as the risk of hydrogen shortages. “There is no way we will miss our annual forecast.”