Fujitsu teams up with NVIDIA and Japan's leading robotics companies to advance physical AI commercialization

Overview

This report focuses on Fujitsu's latest partnership progress in the field of physical AI. During trading on July 16, 2026, Fujitsu announced that it had begun exploring physical AI deployment opportunities powered by NVIDIA technology with Fanuc, Yaskawa Electric, and Kawasaki Heavy Industries. Goldman Sachs believes this announcement differs from the October 2025 partnership with NVIDIA to jointly develop AI platforms, indicating that the company's focus is shifting from technology development toward actual system integration and commercialization.

Core views

The core view is that Fujitsu, as a leading Japanese system integrator, has capabilities in large-scale system development, system integration, system products, and base station technology; physical AI is expected to become an important pillar of new businesses in its 2035 medium-term management plan. In the short term, the negative impact from rising memory costs, price pass-through capability, and component procurement risks still need to be validated by FY3/27 first-quarter results, so the stock may remain weak; however, once these concerns ease, investors may begin to reflect medium-term profit growth driven by physical AI expansion, generative AI applications, UVANCE demand growth, and structural reforms.

Analysis framework

Goldman Sachs analyzes business partnership progress, technical architecture, commercialization timetable, application scenarios, timing of profit contribution, industry comparative valuation, and the company's path to fundamental improvement, and combines its FY3/28 EPS forecast with a segment-weighted P/E valuation to derive the target price.

Methodology notes

• Valuation methodssum-of-the-parts weighted P/E

  segment-weighted P/E valuation

  The target price of ¥4,330 is based on FY3/28 EPS of ¥206 and a target P/E of 21x; the IT services business is valued at about 21-22x P/E, a 20% premium to the industry average of 18.0x, while the hardware business is valued at 20.0x P/E, weighted by profit contribution of 80% for IT services and 20% for hardware.

• factor_analysisGS Factor Profile

  Goldman Sachs factor profile

  GS Factor Profile compares a stock versus the market and industry peers in terms of growth, financial returns, valuation multiples, and composite score; growth uses forward revenue, EBITDA, and EPS growth, financial returns use ROE, ROCE, and CROCI, and valuation multiples use indicators such as P/E, P/B, P/D, EV/EBITDA, and EV/FCF.

• event_analysiscommercialization catalyst analysis

  partnership commercialization catalyst analysis

  The report views Fujitsu's new alliance with NVIDIA and robot manufacturers as a signal of moving from technology development toward system integration and commercialization, and focuses on the factory test in September 2026, AI server production launch in January-March 2027, and profit contribution in FY3/28.

• risk_frameworkM&A Rank

  M&A probability score

  Goldman Sachs' M&A Rank measures acquisition likelihood on a scale from 1 to 3, where 1 represents high, 2 medium, and 3 low; Fujitsu's M&A Rank is 3, so M&A is viewed as unimportant and is not included in the target price.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Fujitsu (6702.T)

  Research target, Buy-rated, beneficiary of physical AI commercialization

  Strengths

  A leading Japanese system integrator with large-scale system development and integration capabilities; it is focusing on key businesses and advancing the sale of non-core businesses; it is expected to benefit from generative AI, UVANCE growth, AI solutions, and new physical AI businesses.

  Weaknesses

  In the short term, the stock has underperformed other major system integrators due to rising memory costs, price pass-through, and component procurement risks.

  Comparison

  Goldman Sachs believes its medium-term profit growth could exceed the industry average, and its IT services business valuation should enjoy about a 20% premium to the industry average P/E.

  Risks

  IT services or hardware demand may decline due to a deterioration in the business environment, telecom operator capex may weaken, loss-making projects may emerge, and memory cost pressure may persist.

• NVIDIA

  Technology partner, providing key technology and GPU support for physical AI

  Strengths

  Its GPU and AI technologies are an important foundation for Fujitsu's AI servers and physical AI platform.

  Weaknesses

  The report does not discuss NVIDIA's own operating weaknesses in detail.

  Comparison

  NVIDIA is not a rated target in this report, but is an important partner in Fujitsu's physical AI ecosystem.

  Risks

  If related AI technology, supply chain, or cost conditions fall short of expectations, Fujitsu's commercialization timeline may be affected.

• Fanuc

  Robotics partner participating in physical AI deployment exploration

  Strengths

  As a robot manufacturer, it helps apply Fujitsu's collaborative control infrastructure to real factory robotics scenarios.

  Weaknesses

  The report does not disclose Fanuc's financial or business weaknesses in detail.

  Comparison

  Together with Yaskawa Electric and Kawasaki Heavy Industries, it forms Fujitsu's physical AI robotics partner ecosystem.

  Risks

  Implementation of the partnership, equipment connectivity, and autonomous operation performance still require testing and validation.

• Yaskawa Electric

  Robotics partner participating in physical AI deployment exploration

  Strengths

  Its robotics and automation equipment capabilities can support deployment of Fujitsu's physical AI in factory scenarios.

  Weaknesses

  The report does not disclose Yaskawa Electric's financial or business weaknesses in detail.

  Comparison

  It participates in Fujitsu's new alliance together with Fanuc and Kawasaki Heavy Industries.

  Risks

  There is uncertainty around the speed of commercialization and standardization of the collaborative control framework.

• Kawasaki Heavy Industries

  Robotics partner participating in physical AI deployment exploration

  Strengths

  It can provide robotics and industrial equipment scenarios to support physical AI's transition from platform development to system integration.

  Weaknesses

  The report does not disclose Kawasaki Heavy Industries' financial or business weaknesses in detail.

  Comparison

  Alongside Fanuc and Yaskawa Electric, it is one of the robot manufacturers in Fujitsu's latest physical AI partnership.

  Risks

  Actual deployment results, industry standardization progress, and end-demand still need to be monitored.

Key data

• RatingBuyFujitsu is listed as Buy in the report.
• 12-month target price¥4,330Based on FY3/28 EPS of ¥206 and a target P/E of 21x.
• Disclosed price¥3,257Fujitsu's price is listed in the company-specific disclosure.
• Market capitalization¥5.5tr / $34.2bnDisclosed on the GS Forecast page.
• Enterprise value¥5.2tr / $31.9bnDisclosed on the GS Forecast page.
• 3-month average daily trading value¥30.0bn / $187.7mnDisclosed on the GS Forecast page.
• FY3/28E EPS¥206.0EPS used in the target price valuation.
• FY3/28E operating profit¥483.0bnDisclosed in the forecast table.
• FY3/28E P/E15.9xDisclosed in the forecast table.
• FY3/28E CROCI37.7%Disclosed in the forecast table.
• 2035 medium-term plan new business target¥3tnPhysical AI is listed as one of the pillars in the FY3/27-FY3/36 medium-term management plan.
• Testing timeSeptember 2026Testing is planned to begin at a factory in Ishikawa Prefecture.

Impact & implications

This partnership strengthens Fujitsu's linkage among AI infrastructure, system integration, and industrial robot control platforms, helping package AI servers, AI platforms, agents, a physical OS, and collaborative control infrastructure into a standardized control system for the industry. If commercialization progresses smoothly, physical AI could expand into factories, retail logistics, and medical robotics, and become a new source of medium- to long-term profit for the company; it could also enhance market recognition of Fujitsu's growth story as differentiated from other system integrators.

Risks

• The magnitude and duration of rising memory costs may negatively affect profits.
• If price pass-through capability and component procurement risks cannot be eased, the stock may remain under pressure.
• A deterioration in the business environment may lead to weaker demand for IT services and hardware.
• Weaker-than-expected telecom operator capex could drag on related businesses.
• Large-scale system integration projects may turn loss-making.
• There is uncertainty around the progress of physical AI testing, system integration, open industry standard platform development, and commercialization.

What to watch

• The magnitude and duration of memory cost impacts in FY3/27 first-quarter results.
• The company's commentary on price pass-through and component procurement risks.
• Progress of physical AI testing at the Ishikawa Prefecture factory in September 2026.
• Progress of AI server production launch in January-March 2027.
• Whether the physical AI business begins to contribute fully to profits in FY3/28.
• Joint development and standardization progress of the collaborative control framework with NVIDIA, Fanuc, Yaskawa Electric, and Kawasaki Heavy Industries.
• Growth in UVANCE demand, divestment of non-core businesses, and the effectiveness of generative AI applications in system development.