Fearful of missing out on the uptrend in the downstream firms supplying networking to the AI sector, investors have three hot stocks to watch.
Lumentum (LITE) opened the week by rising $149.29, up 16.5% to close at $1,053.09. On May 9, Nasdaq (NDX) replaced CoStar (CSGP) with Lumentum. That adds a photonics and optical supplier firm to the index. LITE stock gained 10-fold in only a year, compared to a nearly 60% drop in CSGP stock.
Coherent (COHR) benefited from Lumentum’s rise. On May 6, the company posted a 20.7% Y/Y increase in revenue, to $1.81 billion. Non-GAAP EPS was $1.41. For the fourth quarter, Coherent expects revenue of up to $2.05 billion.
Corning (GLW) jumped by 10.94% to close at $207.39. Although BofA added C.H. Robinson Worldwide (CHRW), Corning, and FedEx (FDX) to its US 1 list, Lumentum likely pumped GLW stock higher on Monday.
Corning expects its capital expenditure to top $1.7 billion. It will ramp up production into 2027-2028. Cash flow more than covers the expenses. That positive cash flow gives investors a reason to expect more upside from GLW stock.
Your Takeaway
The optical network sector benefits immensely from the billions of dollars that Nvidia is investing in each firm. Even after the daily 10% gain, the market capitalization of $65 billion is relatively small. NVIDIA’s market capitalization is over $5.2 trillion.
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