Optical networking has become one of the market’s hottest AI themes this year. Cloud companies are upgrading their data-center networks and replacing more copper connections with optical ones to handle the huge amounts of data AI systems require. That shift has sent demand higher for companies that make optical components, and many of their stocks have outperformed the broader tech sector.
Lumentum Holdings (LITE) is a clear example. LITE stock has gained 155% this year, well ahead of the 35% rise in the Technology Select Sector SPDR Fund (XLK), and is up 473% over the past 52 weeks.
