By Nate Wolf
Optical networking stocks like Coherent and Lumentum Holdings were on the rise Wednesday, continuing one of the hottest artificial-intelligence trades of 2026.
Coherent jumped 4.5% as its CEO joined President Trump's trip to China. Rival outfits Lumentum and Applied Optoelectronics rose 4.1% and 6.1%, respectively. And Corning, which makes fiber data that centers use to pass data within and between AI servers, was up 0.7%.
All four stocks have climbed at least 100% so far this year. Applied Optoelectronics, the leader of the group, has surged 440%.
No single announcement sent the stocks higher Wednesday. But for an industry tethered to the AI data-center buildout, any signals of rising demand at one company can life sentiment across the sector.
Coherent CEO Jim Anderson making the cut for Trump's China visit also appeared to help sentiment. The president said in a social media post that he would ask China's Xi Jinping to "'open up' China so that these brilliant people can work their magic."
Meanwhile, Sanjai Parthasarathi, Coherent's chief marketing officer, left a positive impression at a Needham investor dinner on Tuesday. The company shipped its first transceiver from its 6-inch fab, which should improve gross margins compared to earlier-generation transceivers, Needham reported in a research note Wednesday.
Coherent also got a boost from BofA Securities, which reiterated a Neutral rating on the stock but boosted its price target to $400 from $365. The firm forecast a total addressable AI data-center market of $1.7 trillion in 2030, up from a previous forecast of $1.4 trillion.
"Given 20-30% share in the global transceiver market, we think COHR is best positioned to benefit from higher volumes in 800G/1.6T transceivers, " wrote analyst Vivek Arya. "We maintain our Neutral rating, however, as the current valuation already seems to price in significant earnings power ahead."
Write to Nate Wolf at nate.wolf@barrons.com
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(END) Dow Jones Newswires
May 13, 2026 10:47 ET (14:47 GMT)
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