Quick Read

  • AAOI has surged 367% year to date while LITE posted record $808 million in revenue, both fueled by explosive AI datacenter demand.

  • NVDA invested $2 billion in COHR, deepening a partnership on laser and optical networking products as AI infrastructure scales rapidly.

  • Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Applied Optoelectronics didn't make the cut. Grab the names FREE today.

Optical-networking stocks are catching a bid in midday trading on Wednesday, with the group rallying together as the AI infrastructure trade reasserts itself. Applied Optoelectronics (NASDAQ:AAOI) stock is leading the pack, up 7% to $174, while Lumentum (NASDAQ:LITE) shares are up 5% to $859 and Coherent (NYSE:COHR) stock is trading 2% higher near $363.

Close-up shot of multiple parallel red laser beams shining through a dark environment, hitting and reflecting off a round, dark optical lens with a green band. Bright red light sources are visible in the background and as reflections on the lens, which also shows some scattered red specks. The surface below the lens is dark red and textured.

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The move comes after a choppy stretch for the group. All three names had pulled back sharply over the prior several sessions before today's bounce, so investors are watching whether buyers can defend recent levels.

What's striking is the underlying trend behind today's intraday gains. AAOI is up 416% year to date, while LITE has gained 139% year to date and COHR has climbed 101% year to date.

AI Data-Center Demand Powers the Optics Trade

The catalyst is thematic rather than company-specific. As AI clusters scale, optical interconnects and high-speed transceivers become critical infrastructure for moving massive amounts of data between AI chips and across data centers. That has turned this group into one of the most leveraged ways to play hyperscaler capex.

Applied Optoelectronics is squarely in the middle of that story. The company posted Q1 2026 revenue of $151.14 million, up 51% year over year, with the datacenter segment more than doubling to $81.4 million on its first volume shipment of 800G transceivers to a large hyperscale customer. CEO Thompson Lin pointed to "strong customer engagement around our 800G transceivers and 1.6 Tb products, particularly as AI-driven datacenter investments accelerate."

Lumentum's setup looks similar. The company reported Q3 FY2026 revenue of $808.4 million, up 90% year over year, with co-packaged optics and optical circuit switch backlog already topping $400 million. CEO Michael Hurlston said, "Lumentum delivered an exceptional third quarter, with revenue growing 90% year over year to a record $808 million."

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Applied Optoelectronics didn't make the cut. Grab the names FREE today.

NVIDIA Halo Lifts Coherent

Coherent rounds out the trade, and it now sits at the intersection of the photonics buildout and the NVIDIA (NASDAQ:NVDA) ecosystem. The company posted Q3 FY2026 revenue of $1.81 billion, up 21% year over year, with the Datacenter & Communications segment up 41% to $1.36 billion, now 75% of revenue.