Justin Banks
Growth & Momentum Trader, Founder of Wolves of Wealth
Optics could be one of the biggest AI trades of 2027, the next layer of the buildout after memory led 2026. As AI clusters scale and networking moves from 800G to 1.6T and beyond, demand for optical infrastructure should accelerate. Applied Optoelectronics' earnings will set the tone. The watchlist spans optical modules, silicon photonics, AI networking, connectivity and AI fabric, from Lumentum, Coherent and Fabrinet to Marvell, Arista, Broadcom, Corning and Astera Labs. x.com x.com
Jabil's earnings on Wednesday could send the whole photonics sector running again this week. The watchlist spans networking (Applied Optoelectronics, Credo, Marvell, Arista, Ciena, Broadcom, Cisco), components (Lumentum, Coherent, MACOM, POET, IPG, nLight), infrastructure (Jabil, Fabrinet, Celestica, TTM, Astera Labs, Viavi), materials (Corning, AXT, Lightwave Logic, LightPath), packaging (Aehr, Onto, Amkor) and foundries (TSMC, GlobalFoundries, Intel). x.com
Optics and photonics should be among AI's biggest winners as faster GPU networks need optical connections that suppliers cannot expand quickly enough. Lumentum says some components are sold out through early 2029; Sivers is investing $30M to target more than 100M lasers a year, with operations expected in Q4 2027. Potential US restrictions on Chinese transceivers could reshape supply in 2027. Applied Optoelectronics and Sivers are the favorites. x.com x.com
Applied Optoelectronics makes optical transceivers for data-center networks, which AI scaling needs. x.com
MACOM is priced for perfection after going all-in on the second half. A $100M+ drop in cash went into a big inventory build of finished goods for 800G and 1.6T shipments, so if hyperscaler demand from Meta or Google softens even 5%, it could be left holding expensive specialized chips, and Q3 EPS guidance of $1.31-1.37 is wound tight. The quarter did show real execution: 800G LPO adoption has begun, data center guidance rose to about 40% growth, and its analog moat looks wider than feared. x.com
AI networking and optics growth underpins an extremely bullish outlook for Lumentum, Coherent, Marvell, Credo, Astera Labs and Broadcom. BofA estimates AI networking will grow from $95.6B in 2026 to $394B in 2030, with optical reaching $111B and co-packaged and near-packaged optics reaching $14.1B and $10.7B. Photonics is one of the most interesting investment themes for 2027 onward, though it is a complex market with many players. x.com
AI infrastructure bottlenecks could give eight stocks as much as 18x upside. Nvidia supplies frontier-model GPUs; Broadcom and Marvell supply custom silicon and networking; TSMC makes advanced chips; Micron supplies sold-out HBM; Vertiv provides power and cooling; Palantir monetizes enterprise AI; Alphabet spans TPUs, research, cloud and apps. The list tracks where AI infrastructure spending is flowing. x.com x.com
AI bottleneck semiconductor stocks look to have gotten ahead of themselves, with roughly a hundred near-vertical charts where downside now seems to outweigh upside. They are semis and highly cyclical, and many smaller caps may end up trading like meme stocks. A substantial shakeout would offer a better entry. AI, robotics and energy still have years of growth ahead, but chasing these names now is not advisable. x.com x.com x.com x.com x.com
Applied Optoelectronics should trade above $150, in part because Lumentum's CEO says its optical components are sold out through early 2029 and it cannot meet roughly 70% of demand for some products through 2027. That industry signal strengthens the case for AAOI's expanding 800G/1.6T offerings after completion of its $600M ATM, with shares around $110. x.com
Applied Optoelectronics is a domestic AI data-center bottleneck winner whose results show exponential operating leverage. EPS jumped 186% quarter over quarter and 138% year over year on an 86% revenue surge, as 800G transceiver economics improve with its Texas and Taiwan fabs reaching prime yields. With the US tightening restrictions on Chinese optical supply chains and the FCC banning new Chinese data-center hardware, hyperscalers are flooding it with high-margin orders. x.com
AI infrastructure demand and warehouse automation could make six stocks millionaire-makers by 2030. Nokia's networking partnerships, Broadcom's custom AI chips, Applied Optoelectronics' 800G/1.6T transceivers and Oracle's $664B contracted backlog support the call. IREN is one of the most undervalued neoclouds, with 2 GW of uncontracted power offering major upside amid growing AI demand; Symbotic has warehouse-robotics partnerships with Walmart and Target. x.com x.com x.com x.com x.com x.com
AI demand could drive a big run in Broadcom, IREN, Oracle, Qualcomm, Nokia and Vistra. IREN's 2 GW of uncontracted power gives it massive upside potential; Vistra's roughly 3.8 GW of Meta and Amazon agreements position it for data-center power demand. Broadcom supplies custom AI chips and networking; Oracle has $664B in backlog and a $300B OpenAI deal; Qualcomm is one of tech's most undervalued names with CPU, physical-AI and data-center exposure; Nokia is essential to AI networking. x.com x.com … Show more
