Nvidia CEO Jensen Huang Identifies AI Bottleneck: Three Stocks Poised for Growth

Key Points

• Nvidia has invested $2 billion in Coherent, $2 billion in Lumentum, and $1 billion in Nokia to address data transfer bottlenecks in AI.

• These investments come as demand for faster AI responses increases due to growing consumer comfort with chatbots.

• Coherent reported a 27% revenue surge to $1.8 billion, while Lumentum’s revenue nearly doubled to $808.4 million in their recent quarterly earnings.

Nvidia’s strategic investments in Coherent, Lumentum, and Nokia aim to resolve data transfer constraints critical for AI advancements. In March 2023, Nvidia announced a $2 billion investment in both Coherent and Lumentum, alongside a $1 billion stake in Nokia. Nvidia CEO Jensen Huang emphasized the need for heightened silicon photonics capacity, as current levels fall short of demand.

Coherent reported a 27% revenue growth to $1.8 billion, with earnings per share increasing 55% to $1.41. Lumentum’s revenue surged nearly 90% year-over-year to $808.4 million. Both companies are positioned to benefit from Nvidia’s push for faster AI data processing through photonics technology, which uses light to accelerate data transfer between servers.