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 

United Microelectronics, Jabil and NGK Insulators are better bought back after a historic bear market expected next year than held now, despite a strengthening HyperLight thin-film lithium niobate thesis. Telecom validation widens the market: Ciena is qualifying TFLN as a second source in its shipping WaveLogic 6 Extreme platform, Cisco holds patents bonding lithium niobate onto silicon photonics, and Nokia has worked with HyperLight since 2018. They could be had at half price at the lows. x.com  … Show more

Gooch & Housego is a great defense long that is not expensively valued on future technology, with thin-film lithium niobate as an extra lottery ticket. @MoodyWriter13 notes major co-packaged optics deployments use silicon photonics, making TFLN a likely 2028+ supplement at 1.6T or 3.2T; Gooch & Housego's chance to be a player there is small and uncertain. x.com 

Coherent is the most potentially undervalued photonics play because the market has not caught up to what it has become. Its March 23 demonstration with Tower Semiconductor of 400 Gbps per lane on a silicon modulator, aimed at 3.2T transceivers, is not priced in. Revenue rose from $1.58B to $1.69B with $1.78B guided, and it was first to mass-produce 1.6T transceivers. Despite running from $61 to $336, it trades at a fraction of Arista's and Broadcom's valuations. x.com  x.com 

Lightwave Logic could be the next Lumentum because its Perkinamine polymer, spun onto standard silicon wafers, makes modulators with 110GHz+ bandwidth at 50% less power, a big edge at 800G and 1.6T in AI data centers. Tower Semiconductor and GlobalFoundries integrated it in the same week, and four Fortune Global 500 firms are in Stage 3, prototype to product. Its ARM-like royalty model is capital light. The risk is real: it is pre-revenue, with $70M cash and runway into early 2027. x.com 

Gooch & Housego's H1 2026 trading update supports the thesis: a record £167.3M order book, up 16.5%, signals accelerating demand for photonics and laser systems. Revenue reached £81.9M with 9.1% organic growth, led by aerospace and defense, and management confirmed the semiconductor recovery is underway. Net debt rose to £37M from £29.9M on deliberate inventory and capex to meet the backlog. Trading is in line, but the order book suggests the breakout is just beginning. x.com 

X-FAB's earnings confirmed direct exposure to co-packaged optics and the 800V shift, which should drive a re-rating as markets price growth ahead. Management said it is progressing in CPO, with three silicon photonics projects and photonics volume production expected in 2028, a timeline not in revenue models yet. The 800V transition supports SiC and GaN demand, with three new SiC data center design wins pointing to a 2027 ramp. Current revenue is unimpressive, so some waiting is needed. x.com  … Show more

Lightwave Logic is a short because all of its income depends on one contract that may not be renewed. Its polymers are used by Polariton, which Marvell bought for its plasmonics, but that contract expires next year with no sign of renewal; Marvell quickly canceled the POET contract it inherited via Celestial AI. 2025 research favors lithium niobate over organic materials for stability, which matters most for co-packaged optics reliability, and Marvell calls its design material-agnostic. x.com  … Show more

Coherent's pivot to AI optics is paying off as copper gives way to optical links inside large AI clusters. Quarterly revenue topped $2 billion for the first time, up 42%, with datacenter and communications up 59% to 79% of sales. Multi-year contracts with AI leaders including Nvidia extend order visibility into 2028. It launched its PhotonLink interconnect platform at ECOC 2026, and its indium phosphide, VCSEL and 6-inch wafer strengths give it a moat in 800G and 1.6T transceivers. x.com 

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