AI Capex Boosts Optical Stocks, Some Surge Over 70% in Nine Days
Nashnova编辑部
AI data-center expansion has driven U.S. optical-component stocks sharply higher, with Applied Optoelectronics surging 76% in nine trading days and Lumentum posting 109% year-on-year revenue growth — the market is pricing the optical bottleneck, not just the AI narrative.
Why did optical stocks suddenly rally together?
Since late July, Applied Optoelectronics, Lumentum, Coherent, Fabrinet, and Corning have all gained more than 25%. Applied Optoelectronics led with a 76% surge in nine days; Coherent rose 48%.
The trigger: Lumentum reported FY2026 Q4 results on August 12 — revenue of $1.01 billion, up 109% year-on-year, adjusted EPS of $3.23, both above consensus — and guided Q1 above analyst estimates.
This means → one company's beat lifted the entire sector pre-market. The money treated it as a sector signal, not a single-stock event.
Why are optical components the bottleneck?
Optical components — devices that carry data as light signals instead of traditional copper — handle high-speed interconnects inside data centers. They are faster and more efficient than copper, and the first link to hit capacity during expansion.
Microsoft, Alphabet, Amazon, and Meta keep committing to massive capex → data centers must scale → optical-component demand is pulled directly.
In plain terms = no matter how powerful the AI, it stalls if data can't move fast enough. Optical components are the highway — too narrow, and every car is stuck.
How far can demand grow?
Bloomberg Intelligence expects optical-component demand to accelerate further in 2027.
Applied Optoelectronics grew revenue over 80% last year; this year's forecast rises to 130%, accelerating to 174% in 2027. Its latest Q2 revenue grew 86% year-on-year, and analysts have raised their 2027 revenue estimate by over 90% in the past six months.
The stock is up 285% year-to-date. This reflects a market that is not betting on a quarter — it is paying for a multi-year high-growth curve.
Are valuations already stretched?
Lumentum is up 123% year-to-date. Its forward P/E stands at roughly 41× — more than double its ten-year average of 19× — placing it among the 40 priciest stocks in the S&P 500.
Coherent is up about 78% this year; Fabrinet's valuation also sits at a significant premium to its long-term average.
This means → the market has already pre-paid for high growth. If the pace disappoints, the pullback could be sharp.
What other variables could change the trajectory?
Nvidia's strategic investment: earlier this year, Nvidia committed $2 billion in multi-year funding to each of Lumentum and Coherent to advance silicon-photonics R&D — a technology that uses light instead of electricity to move signals between chips. This further validates optical components' central role in AI infrastructure.
A potential FCC ban: Reuters reports the U.S. Federal Communications Commission is drafting a ban on imports of certain Chinese data-center components, including specific optical transceivers. If enacted, it would tighten the bottleneck advantage for U.S.-based suppliers.
In plain terms = upstream giants are pouring in money + regulators may block competitors = a double tailwind. But Founder ETFs' Michael Monaghan warns: "Once the bottleneck breaks, the value can vanish quickly."
What is the market really watching now?
Market attention to hyperscaler capex trajectories now exceeds attention to optical companies' own quarterly results.
This means → any marginal shift in capex expectations — even a single change in earnings-call language — could become the key inflection point for the sector.
Monaghan's own words: "As long as capex keeps accelerating, these stocks should keep going up. If spending slows, they'll come back down fast."
Content is for reference only, not financial advice.