Key insights
- The post discusses the potential of photonics and optical networking stocks, driven by the increasing demand from AI data centers. While some stocks in the sector have already experienced significant gains, the author questions whether the sector is still in its early stages, considering the expected long-term growth of AI infrastructure. This suggests continued, albeit potentially volatile, growth for related US equities.
I’ve been going down the rabbit hole on photonics / optical networking stocks lately (LITE, AAOI, CRDO, COHR, etc.) and I can’t tell if this is early innings or if we’re already in the “everyone knows” phase.
The bull case seems pretty straightforward:
AI data centers are exploding so a massive need for bandwidth and optics (lasers, transceivers, interconnects) become critical infrastructure.
That part makes sense to me. What I’m struggling with is timing.
Some of these names have already gone on insane runs. At the same time, you keep hearing that we’re still in the early stages of AI buildout and that demand could last for years.
What say you guys?