Optical stocks rallied as analysts argued optics is an AI bottleneck: Lumentum rose 4% to $897, Applied Optoelectronics gained 3% to $80, Corning rose 3% to $131, and Coherent was up only 0.4% at $237. Evercore ISI's Amit Daryanani cited expected U.S. limits on foreign-made optical transceiver imports by the end of the first quarter of 2027, which could shut Chinese suppliers, who make about two-thirds of transceivers today, out of the next-generation 3.2T market. StoneX initiated coverage of Lumentum with a Buy rating and a $1,200 price target, and Jefferies raised its target to $1,250. Lumentum says it cannot meet about 70% of demand for some products through 2027, while Coherent is expanding its indium phosphide laser output after NVIDIA invested $2 billion in each company. Over the past month, Corning fell 17%, Applied Optoelectronics lost 22% and Coherent gave up 20%.
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