Optics Stocks Rise Amid AI Data Center Optimism
Applied Optoelectronics (AAOI), Coherent (COHR), and Lumentum (LITE) all saw significant gains on July 31, with shares rising by up to 7%, outperforming the broader semiconductor ETF SOXX. The surge reflects growing optimism around AI data center infrastructure demand for optical interconnects. LightCounting forecasts that the AI cluster optics market will grow from $16.5 billion in 2025 to $26 billion by 2026, driven largely by high-speed transceivers and optical circuit switches. Applied Optoelectronics has seen datacenter revenue more than double recently, while Coherent's Datacenter segment grew 41% year-over-year. Despite strong growth narratives, valuations remain a concern for investors. Both Coherent and Lumentum trade at over 127x trailing earnings, with Applied Optoelectronics still unprofitable despite its stock surging by 176% this year.
Tickers: $AAOI $COHR $LITE $SOXX