Nvidia Gets The Headlines. But This Optical Networking Stock Was The Bigger AI Surprise - Yahoo Finance

While NVIDIA dominates headlines in the booming artificial intelligence (AI) market as the world's largest producer of data center GPUs, a lesser-known optical networking stock, Coherent (COHR), has o... Read original →

The AI compute arms race is cascading from chips to optical interconnects. NVIDIA’s denser GPU clusters demand rapid migration from 800G to 1.6T and even 3.2T optical transceivers, rendering copper interconnects obsolete. Coherent’s 400% stock surge reflects market repricing of photonics infrastructure, not speculation—its thin-film lithium niobate and silicon photonics position it at a critical bottleneck. Tightening U.S. export controls on advanced optical components will raise compliance costs but accelerate substitution by suppliers in Taiwan, China and mainland China. Expect intensified IP battles between Coherent, Lumentum, and Innolight, especially in co-packaged optics (CPO). Over the next 18 months, as Meta and Microsoft shift capex toward optical layers, Coherent’s margin leadership hinges on yield control; failure risks marginalization by vertically integrated cloud titans. The window for standalone photonics champions is narrowing.