If you put $10,000 in Micron one year ago, you’d have almost $40,000 today. And if you drop that money into SanDisk, you’d have over $100,000 right now. That’s because these companies are solving big bottlenecks in the AI market. So data centers are buying everything they make. And in this video, I’ll highlight three more AI stocks winning big for the same reason, making them a great way to get rich without getting lucky. Your time is valuable, So, let’s get right into it. First things first, I’m not here to hold you hostage. This video is all about optical networking, and here are the stocks I’m going to cover. Lumentum, ticker symbol LITE, which is the leading supplier of lasers and optical switches for AI data centers.
Coherent, ticker symbol COHR, which builds high-speed transceivers and optical interconnects.
And Sienna, ticker symbol C-I-E-N, which builds long-haul optical networks connecting multiple data centers together and of course which of these three stocks I think is the best buy right now.
Optical Networking Introduction
I want to make the best use of your time, so let’s start with the big picture and cover what these companies have in common, like their markets, their revenues, and their risks right now.
AI Data Centers
AI data centers have three big bottlenecks: compute, memory, and networking, they’re also limited by power, so every watt of compute, memory, and networking matters even more.
Gpus used to be the main constraint, but with each new generation, like Nvidia’s Hopper, Blackwell, and Rubin, we have more compute capacity than most models actually need, so the real limit becomes how fast those gpus can access data and how quickly that data can be moved.
TurboQuant Breakthrough
But something big just happened in this space, which is why I’m making this video right now: Google DeepMind just released a data compression method called TurboQuant, which optimizes how data is stored, retrieved, and reused by gpus.
Without getting too into the weeds, every time an AI model generates a token, it has to store lots of numbers in what’s called the KV cache, for models with billions of parameters and long context windows, that KV cache can eat up most of a gpu’s memory.
Table of Contents
1. Optical Networking Introduction
2. AI Data Centers
3. TurboQuant Breakthrough
4. Lumentum Analysis
5. Coherent Analysis
6. Sienna Analysis
7. Frequently Asked Questions
TurboQuant is a huge deal because it cuts the KV cache size by over 80 percent, it speeds up key parts of inference by up to 8x, and it can be applied to existing models without any retraining or fine tuning.
Lumentum Analysis
This is a big breakthrough that will affect many parts of the AI stack, but here’s the part we care about right now: thanks to TurboQuant, gpus will spend a lot less time waiting on high bandwidth memory, which means they can process a lot more tokens in the same amount of time, as long as the network can keep up.
That means the network just became the next big bottleneck, so optical networking just became even more important.
Coherent Analysis
At a high level, optical networking is just networking with light instead of electricity, traditional routers and switches send electrical signals over copper wire, which works well for short distances, but breaks down for large distributed AI data centers.
Sienna Analysis
Optical networks transmit light through glass fibers, which can carry much more data over much longer distances with much lower losses and interference, so while copper is great inside a server or inside one rack, serious AI clusters need optics to move data between racks, between buildings, and even across continents using undersea fiber optical links can push 400G, 800G, or even 1.6T of bandwidth per port.
G stands for Gigabits per second. Your copper internet connection at home is probably hundreds of megabits to 1 gigabit per second. If you google internet speed test, you’ll see your current internet speeds, and hopefully they’re close to what you’re paying for. 1 gigabit per second is fast enough to stream dozens of 4k videos at a time a 400g optical connection in a data center is 400 times faster than that and 1.6 t means 1.6 terabits per second or 1600 g that’s the kind of bandwidth that large ai clusters need as gpus start pumping out more tokens every second one more important point before we get into the stocks optical networking isn’t a single product it’s a full stack tiny laser chips and photonic components generate and detect the light.
Transceivers are the little plug-in modules that sit in a switch or in a server port to both transmit and receive data, which is why they’re called transceivers. They turn electrical signals from the chip into light at one end of the fiber, and then they turn that light back into electrical signals at the other end. Then, full optical systems and software stitch all those links together into complete networks. Lumentum, Coherent, and Sienna dominate different layers of this stack making them great ways to invest in the shift to optical now that networking is becoming the next major bottleneck for AI But while everyone focused on AI and chip stocks gold has quietly rallied by 50 in the last year alone.
Believe you can and you are halfway there. – Theodore Roosevelt
The problem is, owning a single miner usually means a single team, digging metal out of a single hole in the ground. That’s where Versamet Royalties comes in, the sponsor of this video. of running mines, Versamet finances them and collects a slice of every ounce produced through royalties and metal streaming contracts. The higher gold and silver prices get, the more each stream is worth. Versamet produced over 9,800 gold equivalent ounces in 2025, nearly double the year before, and they’re guiding to over 20,000 ounces in 2026.
Key Takeaways
- Lumentum is a leading supplier of lasers and optical switches for AI data centers.
- Coherent builds high-speed transceivers and optical interconnects.
- Sienna builds long-haul optical networks connecting multiple data centers together.
- Optical networking is becoming increasingly important due to the growing demand for AI and data centers.
- TurboQuant is a data compression method that optimizes how data is stored, retrieved, and reused by gpus.
They have an impressive track record, deploying over $400 million across 28 royalty and metal streams so far, giving investors exposure to gold, silver, and copper across multiple mines on multiple continents all with one ticker and this isn’t their first rodeo.
Their CEO, Dan O’Flaherty, previously built a royalty company that got acquired for around 750 million dollars and he’s running First Met with much of the same team, no wonder more than 75 percent of shares are held by strategic investors and insiders.
So if you want to invest in a diversified portfolio of gold and precious metals, especially in this economy, check out Versa Met Royalties, they just began trading on the Nasdaq on March 6th under the ticker symbol VMET.
This is not financial advice and I’m not a licensed financial advisor, so do your own due diligence before making any investment decision, investing in mining stocks involves significant risk, including the possible loss of your entire investment, so make sure to see the full disclosure in the description below.
Investment Opportunities
All right, Lumentum, Coherent, and Sienna all sell into the same core markets, hyperscale cloud providers, building AI clusters, big telecom operators upgrading their infrastructure, and large enterprises that need high capacity connectivity that ties their revenues directly to the same capex cycle that drives Nvidia, Broadcom, and the rest of the data center stack.
| Company | Ticker Symbol | Revenue Growth |
|---|---|---|
| Lumentum | LITE | 65% |
| Coherent | COHR | 17% |
| Sienna | C-I-E-N | 33% |
They also have similar business models, heavy upfront investments in research, fabs, and specialized manufacturing that turn into multi-year design wins and supply agreements for lasers, modules, and end-to-end systems, that means their margins depend on how fast hyperscalers and telecom carriers are expanding since the more they sell, the more revenue they make against these big upfront fixed costs.
They also have similar risks, like customer concentration, a handful of cloud providers and telecom companies account for a big chunk of this market, so any pauses on spending can hit all three of these companies at once.
They also sit in the middle of complicated global supply chains for things like wafers, lasers, and advanced packaging. So supply chain disruptions, export controls, or tariffs can impact costs and delay delivery timelines. And they all have serious competition from tech giants like Broadcom, Nokia, and Huawei, which limit their long-term pricing power once supply catches up with demand. But on the flip side, they also have the same big tailwinds ai optics alone are projected to jump from roughly an 18 billion dollar market in 2025 to around 90 billion dollars by 2030 and every time companies like nvidia and google solve a compute or memory bottleneck they put more pressure onto the network lumentum coherent and sienna are all positioned to capture revenue by releasing that pressure let’s start with lumentum ticker symbol lite because they’re currently the leader in lasers and optical switches for data centers.
External References
For more information on Lumentum, Coherent, and Sienna, please visit their official websites or check out the following resources:
Lumentum’s latest quarter really tells the story here. Their revenue came in at $665 million, which is up 65% year over year. Their non-gap operating margins came in at 25.2%, up from just 8.2% a year ago. Most of that growth came from their components segment, which sells the laser chips and photonic parts that go inside high-speed transceivers and co-packaged optics modules for hyperscalers when you hear the term co-packaged optics that just means that the optical engines which are the parts with the lasers that turn electric signals into light and light back to electric again sit right next to the chip instead of at the edge of the circuit board today most switches use pluggable transceivers in the front panel which means every bit of data moves as electrical signals for several centimeters before getting converted into light at 800 or even 1600 G speeds that burns a lot of power and adds a lot of losses.
But co-packaged optics put the lasers in the same package as the switch chip or the accelerator, which makes the electrical distance a few millimeters. That 10x reduction in distance cuts power per bit by 30 to 70 percent It improves signal strength and it lets hyperscalers keep scaling to 1 or even 3 terabit per second speeds without melting their chips or their cooling budgets. That’s why massive AI clusters are shifting more of their networks to optics, and Lumentum’s ultra-high power lasers and optical engines are being built specifically for these deployments. So, if co-packaged optics are the future of AI networks, then Lumentum is the company selling the light. Lumentum’s revenue from components hit $444 million last quarter, representing about two-thirds of their total sales.
And management is now guiding for around $805 million in total revenues for next quarter, which would imply 21% growth quarter over quarter. At OFC 2026, which is the Optical Fiber Communication Conference held earlier this month, Lumentum’s management laid out a path to $2 billion in quarterly revenues within the next two years, roughly a 3x from here. That number is backed by real orders. The backlog for their R300 optical circuit switch is now over $400 million, and they’re already booking massive orders for co-packaged optics shipments starting in 2027.
And of course, NVIDIA announced a multi-year agreement with Lumentum earlier this month, including a two billion dollar cash investment and a multi-billion dollar purchase agreement for lasers and optical engines.
Frequently Asked Questions
What is optical networking?
Optical networking is a method of transmitting data as light signals through fiber optic cables, rather than as electrical signals through traditional copper wires.
What are the benefits of optical networking?
The benefits of optical networking include higher bandwidth, lower latency, and increased security compared to traditional networking methods.
Which companies are leading in optical networking?
Lumentum, Coherent, and Sienna are leading companies in the optical networking industry.
What is the growth potential of the optical networking market?
The optical networking market is projected to grow from $18 billion in 2025 to $90 billion by 2030.
How can I invest in optical networking companies?
You can invest in optical networking companies by purchasing their stocks through a brokerage firm or online trading platform.
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