@elonmusk As the most daring man in the world, you are the superman in my heart. Looking forward to the world's first mass space power generation to be realised one day.
@ChrisY01110684@HKIStrategies In fact, there is some reason for your analysis. Yesterday, there was a good chance to fall below 130 easily. I also think the bottom is in the range of 120-130.
Continuous wave laser capacity is expected to increase from 83 million units in 2025 to 427 million in 2029, representing more than fivefold growth.
Continuous wave lasers produce the steady light used by silicon photonics systems to transmit data through fiber optic cables and they are very important because large AI clusters must move enormous amounts of data among thousands of GPUs, servers and networking switches.
Copper connections become less efficient as bandwidth and distance increase, so data centers are shifting toward optical connections that can transmit more data with lower signal loss.
Continuous wave lasers provide the light source for silicon photonics transceivers and emerging co packaged optics systems.
Demand will increase as AI networks move from 400G to 800G, 1.6T and eventually 3.2T connections and as larger AI clusters also require more optical links, which means laser demand can grow faster than the number of GPUs installed.
Now here are some of the stocks that will benefit from this.
Lumentum is the most direct US listed beneficiary because the company supplies continuous wave lasers, electro absorption modulated lasers, transceivers and optical switching products for AI data centers.
Lumentum says demand is substantially exceeding supply and expects shortages to continue through 2027 and potentially into 2028.
Coherent is another major beneficiary because it manufactures high power continuous wave lasers, photodiodes, transceivers and complete optical systems.
Coherent is ramping a 400 milliwatt continuous wave laser for silicon photonics transceivers and co-packaged optics while expanding its six-inch indium-phosphide manufacturing capacity.
Applied Optoelectronics will benefit from this transition because company designs and manufactures lasers, optical components and complete transceiver modules used by large internet data center operators.
AAOI offers more direct exposure to the adoption of 800G and 1.6T transceivers than to the standalone continuous-wave laser capacity shown in the chart and its 800G revenue more than doubled sequentially during the second quarter of 2026, and management expected it to grow nearly fivefold in the following quarter while beginning initial 1.6T shipments.
The company is expanding US manufacturing capacity for high power lasers, transceivers and products designed for co packaged optics systems.
AAOI may have greater upside than larger competitors because it is a smaller company and its business is highly exposed to AI optical demand.
Broadcom also benefits through its lasers, networking switches, custom AI accelerators and silicon-photonics products but Broadcom is less dependent on laser sales than Lumentum, Coherent or AAOI, but it offers broader exposure to the entire AI networking stack.
Sumitomo Electric, traded in Japan as 5802, supplies continuous wave lasers, EMLs, fiber and optical connectors and it offers a more diversified investment because it also operates large automotive, electrical and energy-infrastructure businesses.
This is why I still think photonics is one of the most underrated parts of the AI infrastructure trade, make sure to follow @MelvinInvests for more AI and photonics insights.
And if you want to see exactly what stocks I'm buying to play this buildout, you can join Milk Road Pro for just $1 using the link below.
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