Shares of multiple optical-equipment companies surged in pre-open trading Wednesday after executives and analysts detailed demand trends and capacity plans at the Optical Fiber Communication Conference (OFC).
Applied Optoelectronics (NASDAQ:AAOI) led the moves, jumping 9% pre-open. Lumentum (NASDAQ:LITE) advanced 7%, Coherent (NASDAQ:COHR) rose 2.3%, and Viavi Solutions (NASDAQ:VIAV) gained 1% as companies on the conference stage discussed growth opportunities tied to AI-driven networking upgrades.
Conference commentary echoed a growing industry narrative that next-generation optical interconnects and co-packaged optics will be important elements of AI infrastructure expansion. Nvidia CEO Jensen Huang was cited during presentations as urging the need for increased-capacity optical interconnect solutions, while also noting that copper connections will remain in heavy demand. Those remarks framed part of the bullish tone around optics suppliers.
Analyst Mike Genovese of Rosenblatt described Lumentum’s presentation as bullish and characterized other company presentations as thoughtful, calling day one of OFC positive. Genovese highlighted the timing and scale of CPO adoption, saying scale-up co-packaged optics starts in 2028 at 400G per lane or 3.2T, and that this step represents a material content-gain opportunity for optical vendors.
On the supply side, Genovese noted that indium phosphide lasers are sold out through 2027 and into 2028, a situation he attributed to transceiver demand and some scale-out CPO activity. That tightness has prompted capacity investments: companies including Lumentum and Coherent are building new manufacturing capacity aimed at scale-up CPO, which Genovese said suggests the AI infrastructure expansion cycle could continue until the end of the decade.
Coherent provided its own market-sizing perspective at the conference, stating that optical circuit switching, next-generation pluggable optics and CPO, multi-rail architectures, and thermal solutions add more than $20 billion to its existing $50 billion serviceable addressable market. The company sized its CPO SAM as over $15 billion in 2030.
Applied Optoelectronics outlined specific product and volume plans tied to CPO in its capacity ramp program. The company said it will include 300mw/400mn External Laser Small Form-Factor Pluggable modules for CPO and forecasted production of 5,000 ELSFP units per month exiting 2026, rising to 50,000 units per month by mid-2027 and 400,000 units per month exiting 2027.
Taken together, the presentations and estimates delivered at OFC helped lift optics-related equities in pre-market trade as investors priced in expanded content per system and multi-year infrastructure build dynamics tied to AI deployment.