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3 Optical Component Giants in Focus on Massive AI Data Center Growth
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Key Takeaways
Corning is expanding optical connectivity offerings to support growing AI network demand.
Lumentum is benefiting from hyperscaler demand and NVIDIA silicon photonics collaboration.
Coherent sees strong AI data center bookings extending into 2027 and customer forecasts into 2028.
The artificial intelligence (AI) frenzy remains intact as the AI infrastructure space remains rock solid, supported by an extremely bullish demand scenario. Research firm McKinsey & Co. has estimated that global AI-powered data center infrastructure capex will reach around $7 trillion by 2030.
Optical and photonics products are in tremendous demand for serving global cloud and AI/ML infrastructure. Here, we recommend investors keep a close watch on three optical component behemoths that have skyrocketed year to date. Industry-leading products of these companies and the unstoppable growth of AI-powered data centers make these stocks attractive investment opportunities for the long term.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Corning Inc.
Corning continues to focus on developing state-of-the-art cover materials, which have been deployed on more than 8 billion devices. GLW offers several products focused on the data center, with a portfolio consisting of optical fiber, hardware, cables and connectors, enabling it to create optical solutions to meet evolving customer needs. This augurs well for its long-term growth.
The growing adoption of innovative optical connectivity products for generative AI applications is expected to be a key growth driver for GLW in the upcoming quarters. Since both consumers and enterprises are using networks more extensively and the data thus generated is increasingly being used to train AI models, there is tremendous demand for quality networking.
Additionally, data consumption patterns are changing, with a growing propensity to consume video content, creating the need for faster data transfer. Since optical networks are more efficient and most existing networks are copper-based, the demand for GLW’s optical solutions is particularly strong.
On May 6, Corning and NVIDIA Corp. (NVDA - Free Report) entered a multiyear commercial and technology partnership to expand U.S.-based manufacturing of the advanced optical connectivity solutions needed to power next-generation AI infrastructure.
Corning has an expected revenue and earnings growth rate of 13.3% and 26.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.6% in the last seven days.
Image Source: Zacks Investment Research
Lumentum Holdings Inc.
Lumentum Holdings designs and manufactures optical and photonic technologies for high-speed telecommunications, data centers, and advanced manufacturing. LITE provides components, such as transceivers and lasers for fiber-optic networks, supporting the rapid growth of AI, cloud computing, 5G connectivity, and beyond.
LITE’s technology leadership in high-speed optical components has positioned it as an essential supplier to hyperscale customers deploying next-generation network architectures. Moreover, LITE has a strong collaboration with NVIDIA for developing NVDA’s silicon photonics ecosystem, especially for deploying the latter’s Spectrum-X Photonics networking switches.
Lumentum Holdings has an expected revenue and earnings growth rate of 84.8% and more than 100%, respectively, for the next year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 7.5% in the last seven days.
Image Source: Zacks Investment Research
Coherent Corp.
Coherent is positioned at the center of the AI datacenter build-out, which has driven sustained strength in Datacenter and Communications from fiscal 2025 through the second quarter of fiscal 2026 and is expected to continue with double-digit sequential growth in the third and fourth quarters of fiscal 2026.
COHR reports record booking visibility, with most of calendar 2026 already booked, orders extending into calendar 2027, and customer forecasts reaching into calendar 2028 alongside multiple long-term agreements. This depth of demand materially reduces near-term revenue uncertainty and supports durable top-line momentum.
COHR’s mix should improve as higher-value pluggables ramp up and as the shift to larger indium phosphide wafers lowers unit costs, positioning margins to expand. COHR’s portfolio is widening with growing systems and co-packaged optics, adding optionality. Capacity is scaling, and the balance sheet is improving.
Coherent has an expected revenue and earnings growth rate of 30.9% and 38.4%, respectively, for the next year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 1.6% in the last seven days.
Image Source: Zacks Investment Research
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3 Optical Component Giants in Focus on Massive AI Data Center Growth
Key Takeaways
The artificial intelligence (AI) frenzy remains intact as the AI infrastructure space remains rock solid, supported by an extremely bullish demand scenario. Research firm McKinsey & Co. has estimated that global AI-powered data center infrastructure capex will reach around $7 trillion by 2030.
Optical and photonics products are in tremendous demand for serving global cloud and AI/ML infrastructure. Here, we recommend investors keep a close watch on three optical component behemoths that have skyrocketed year to date. Industry-leading products of these companies and the unstoppable growth of AI-powered data centers make these stocks attractive investment opportunities for the long term.
These are: Corning Inc. (GLW - Free Report) , Lumentum Holdings Inc. (LITE - Free Report) and Coherent Corp. (COHR - Free Report) . Each of our picks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Corning Inc.
Corning continues to focus on developing state-of-the-art cover materials, which have been deployed on more than 8 billion devices. GLW offers several products focused on the data center, with a portfolio consisting of optical fiber, hardware, cables and connectors, enabling it to create optical solutions to meet evolving customer needs. This augurs well for its long-term growth.
The growing adoption of innovative optical connectivity products for generative AI applications is expected to be a key growth driver for GLW in the upcoming quarters. Since both consumers and enterprises are using networks more extensively and the data thus generated is increasingly being used to train AI models, there is tremendous demand for quality networking.
Additionally, data consumption patterns are changing, with a growing propensity to consume video content, creating the need for faster data transfer. Since optical networks are more efficient and most existing networks are copper-based, the demand for GLW’s optical solutions is particularly strong.
On May 6, Corning and NVIDIA Corp. (NVDA - Free Report) entered a multiyear commercial and technology partnership to expand U.S.-based manufacturing of the advanced optical connectivity solutions needed to power next-generation AI infrastructure.
Corning has an expected revenue and earnings growth rate of 13.3% and 26.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.6% in the last seven days.
Image Source: Zacks Investment Research
Lumentum Holdings Inc.
Lumentum Holdings designs and manufactures optical and photonic technologies for high-speed telecommunications, data centers, and advanced manufacturing. LITE provides components, such as transceivers and lasers for fiber-optic networks, supporting the rapid growth of AI, cloud computing, 5G connectivity, and beyond.
LITE’s technology leadership in high-speed optical components has positioned it as an essential supplier to hyperscale customers deploying next-generation network architectures. Moreover, LITE has a strong collaboration with NVIDIA for developing NVDA’s silicon photonics ecosystem, especially for deploying the latter’s Spectrum-X Photonics networking switches.
Lumentum Holdings has an expected revenue and earnings growth rate of 84.8% and more than 100%, respectively, for the next year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 7.5% in the last seven days.
Image Source: Zacks Investment Research
Coherent Corp.
Coherent is positioned at the center of the AI datacenter build-out, which has driven sustained strength in Datacenter and Communications from fiscal 2025 through the second quarter of fiscal 2026 and is expected to continue with double-digit sequential growth in the third and fourth quarters of fiscal 2026.
COHR reports record booking visibility, with most of calendar 2026 already booked, orders extending into calendar 2027, and customer forecasts reaching into calendar 2028 alongside multiple long-term agreements. This depth of demand materially reduces near-term revenue uncertainty and supports durable top-line momentum.
COHR’s mix should improve as higher-value pluggables ramp up and as the shift to larger indium phosphide wafers lowers unit costs, positioning margins to expand. COHR’s portfolio is widening with growing systems and co-packaged optics, adding optionality. Capacity is scaling, and the balance sheet is improving.
Coherent has an expected revenue and earnings growth rate of 30.9% and 38.4%, respectively, for the next year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 1.6% in the last seven days.
Image Source: Zacks Investment Research