The new wave of artificial intelligence-connected stocks are visible, with light art companies that performed best in the broader market last year.
This increase has been driven by the growing need for fast data transmission. Companies like Lumentum (NASDAQ: LITE ) led the rally, posting a whopping 1,137% gain over the past 12 months, making it one of the best-performing stocks. The value of the S&P500.
Applied Optoelectronics ( NASDAQ:AAOI ) is up 551%, Coherent ( NYSE:COHR ) is up 282%, Corning ( NYSE:GLW ) is up 223%, and Fabrinet ( NYSE:FN ) is up 176% over the same period.
This contrasts with the broader Nasdaq 100, which returned 23% over the same period, and highlights the interest of investors in this part of the AI ecosystem.
Why optical stocks are losing ground
In particular, the conference is inspired by the important role these companies play in the next generation of AI. Optical equipment, which uses light instead of copper wire, is essential in data centers for maximum efficiency.
The transition from copper to optical solutions is increasing as the industry works to overcome power and bandwidth limitations in large AI networks.
Technologies such as 1.6T transceivers, co-packaged optics (CPO), and optical circuit switches (OCS) are at the forefront, enabling fast and energy-efficient data transfer between GPUs and racks.
At the same time, interest has been fueled by the huge investment of hyperscalers, which is expected to exceed $430 billion in 2026 alone.
Investor Interest was boosted in early March when Nvidia (NASDAQ: NVDA) announced plans to invest $2 billion each in Lumentum and Coherent, showing strong confidence from the leading AI machine developer in the long-term demand for social networking solutions.
Meanwhile, Bank of America researchers have predicted a 10% annual growth in the smart transportation market for 2026 and 2027, describing it as an “AI supercycle” supported by strong assets and a long lead time for capacity expansion.
However, some volatility has occurred, taking profits in late March amid growth semiconductor weakness, although there is an increase in the overall performance of the system and the strong signals in the OFC.
