Top 3 Fiber Optics Stocks as AI Demand Drives Gains
Fiber optics stocks are lighting up the markets as an AI infrastructure play.
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Much has been said and written about the rotation away from technology into more mundane areas. The recent surge in hotels, homebuilders and consumer staples stocks is evidence that tech has lost favor with investors, at least for now.
However, there is one corner of tech that is doing quite well. Fiber optics is one of the hottest areas in tech right now.
Fiber Optics Shine a Light
Why are fiber optics stocks lighting up the markets? This tech sub-sector is being driven by demand for ultra-high bandwidth, which is needed to train and deploy large-scale AI models. Fiber optics companies use technology that transmits data in the form of light pulses via thin cables of glass or plastic.
What are the hottest stocks in the fiber optics sector right now? Let’s go to the charts to find out. One caveat: each of the following stocks is currently overbought, so traders should consider waiting for a pullback.
1. Lumentum Holdings (LITE)
Shares of Lumentum (LITE) have gained 53% since the start of this year, and 640% over the past 12 months. This San Jose-based company designs optical and photonics products, including lasers and components. Lumentum closed at an all-time high of $600 on February 17.
Lumentum reported solid earnings earlier this month, causing the stock to skyrocket into overbought levels. Ideally, traders should look to buy on a pullback to the 50-day moving average (blue), or the stock’s bullish trend line (black dotted line). This gives us a buy range in the area between $375 and $402.
GRADE: B
2. Ciena Corp (CIEN)
Shares of Ciena (CIEN) have gained 26% year-to-date, and have climbed 246% over the past 12 months. Based in Hanover, Maryland, Ciena creates high-speed networking systems, with an emphasis on optical transport.
The ideal price for Ciena buyers is in the $250 area, where the stock’s 50-day moving average (blue) and year-long bullish trendline (black dotted line) converge. Ciena is scheduled to report earnings on March 5.
GRADE: B-
3. Corning Inc. (GLW)
Named for its hometown in upstate New York, Corning shares have gained 45% since the start of this year, and 149% over the past 12 months. In addition to optical fiber, the company produces Gorilla Glass, a lightweight, damage resistant sheet glass used in smartphones, tablets and laptops.
The ideal price to buy Corning would be on a pullback to the area between $92 and $100, where the stock’s 50-day moving average (blue) and bullish trendline (black dotted line) currently reside.
GRADE: B-
At the time of publication, Ponsi had no positions in any securities mentioned.
