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 

Rising 1.6T switching demand favors optical suppliers, though their execution risks vary. Bank of America says the market could grow ~101% annually through 2030. Marvell's leading DSPs and Lumentum's supply-short 200G EML lasers are lowest risk; Applied Optoelectronics' capacity expansion and Fabrinet's customer concentration make them medium risk. Aeluma remains pre-commercial, while Lightwave Logic's polymer modulators are a high-risk moonshot despite its TSM partnership. x.com 

Optical component stocks such as Lumentum, Coherent, Applied Optoelectronics and AXT look early in an unwind, as a wave of new photonics paid newsletters signals a crowded narrative. Price pays; narratives do not. x.com 

Soitec gains from co-packaged optics, which multiply its Photonics-SOI content about 4x per optical port, from roughly 50mm² in a pluggable to 200mm² in a CPO switch. Its proprietary Smart Cut process, with over 4,300 patents and 12-24-month foundry qualification lock-in, gives it over 95% of photonics substrates. Morgan Stanley upgraded it to overweight with a €70 target, up from €35, citing an underappreciated mix shift that should expand gross margins. x.com  x.com  x.com 

Photonics stocks remain attractive as AI optical-component demand exceeds supply: Lumentum's CEO says the company cannot meet 70% of demand for some products through 2027 or 30% for others through 2028, with some components sold out into early 2029. The cited basket is LITE, MRVL, AAOI, COHR, SIVE and AEHR. x.com 

Soitec now looks overextended after a rapid run, and a pullback is likely. The AI photonics bottlenecks behind the thesis are real, but it is hard to judge what premium each name deserves, which makes the stock hard to value at these levels. x.com 

Applied Optoelectronics' case now hinges on visible production progress. Its drop on OpenAI's revenue run-rate figures reflected an accounting question, not any change in laser or memory supply, per Carrio Research. If AAOI fails again next quarter and pushes its timelines out another quarter, it will be ugly. x.com 

Interconnect, not compute, is now the binding constraint on AI clusters. Copper, pluggable optics and CPO will coexist for years, so the strongest names span both paths or own the tightest bottleneck. Top five: Credo, the fastest-growing full stack; Applied Optoelectronics, the 800G/1.6T ramp; Marvell, broadest but richly priced; Lumentum, the laser chokepoint; Tower, the foundry bet. Coherent, Amphenol, Fabrinet, GlobalFoundries, TSMC and Broadcom also gain. Astera Labs is pricier and narrower. … Show more

Photonics stocks look like a crowded rotation rather than a better bet than memory. Photonics has a smaller addressable market than memory and moves with it anyway. Buyers are driven by recency bias after Applied Optoelectronics' 90% recovery, traders liquidated in memory seeking higher-risk bets, and smaller companies with higher multiples. @therogueoracle adds that these stocks had massive runs and have not pulled back nearly enough, so they are more likely to chop sideways and down. x.com  … Show more

Coherent should benefit as the shift from copper to light inside AI data centers accelerates, with co-packaged optics now in production and near-packaged optics pulling revenue forward. Nvidia's Spectrum-X Photonics switch is in full production, and TrendForce says CPO has entered mass production. Coherent CEO Jim Anderson says CPO and NPO engagement jumped in the past three to six months, nearly every large customer has a project, and its content per socket is similar in either design. x.com