AI Data Center Spending Accelerates, Optical Communication Stocks Rally
Taylor Wilson
Alphabet's earnings confirmed AI data-center capex is still expanding, sending optical and cloud-infrastructure stocks sharply higher. Stifel called the read-through overwhelmingly positive for the sector.
Which stocks moved, and by how much?
MaxLinear (MXL) jumped over 7%, leading the pack. Applied Optoelectronics (AAOI) and Hut 8 (HUT) each rose more than 5%.
Lumentum (LITE), AXTI, and Nebius (NBIS) gained over 4%. Coherent (COHR) added over 3%; Corning (GLW) climbed more than 2%.
CoreWeave (CRWV) rose over 1.6% and IREN over 2.7% — from optical components to compute infrastructure, the entire supply chain moved.
Why did the whole sector rally at once?
The catalyst was Alphabet's after-hours earnings on Wednesday: AI data-center capital spending is still expanding, prompting the market to reprice optical-network and data-center infrastructure suppliers.
This means → the money logic is straightforward — a hyperscaler confirms it is still pouring capital into data centers, so the companies supplying those data centers are worth more.
In plain terms = Alphabet's report told the market: "We're not slowing down — keep buying equipment." Equipment makers' share prices responded instantly.
Who did Stifel name?
Stifel analysts flagged Lumentum, Celestica, and Coherent as "the highest-Alphabet-exposure names in our hardware coverage," calling the earnings a positive signal for optical-component and interconnect suppliers.
They also named Marvell Technology as a key optical DSP — digital signal processor, the chip that converts light signals into electrical signals a processor can read — supplier.
Semtech benefits from supplying active copper cables (data cables with built-in chips that amplify the signal) to Alphabet; Monolithic Power Systems has "solid exposure" on the power side.
Can this rally last?
Stifel called the initial read-through "overwhelmingly positive for the entire sector," adding it should create a positive expectation bias for upcoming hyperscaler capex numbers.
The key checkpoints: Microsoft reports July 29, Amazon reports July 30. If both confirm capex expansion, the optical-communications rally has a foundation to continue.
This means → Alphabet is only the first card. What the market is really betting on is whether "every major cloud player is ramping spend" gets confirmed one by one.
Content is for reference only, not financial advice.