Shares of optics technology firms **Lumentum Holdings (NASDAQ: LITE)** and **Coherent (NYSE: COHR)** surged following **Nvidia’s** announcement on **Monday** to invest **$2 billion** in each company. This investment aims to enhance advanced optics technologies critical for scaling AI factories and improving energy efficiency in AI networks.
Both companies specialize in **indium phosphide (InP)** lasers, essential for high-bandwidth connections. According to **TrendForce**, global shipments of optical transceivers are forecasted to increase **2.6 times** this year over the **24 million** units shipped last year, highlighting a significant supply-demand imbalance. Despite a dip in stock prices on **Tuesday** amidst market volatility related to geopolitical tensions, Coherent and Lumentum’s stock prices are up **54%** and **92%** year-to-date, respectively.
