NVIDIA Is Down in 2026. The Companies Selling It Light Are Not.

The Customer Is on Stage, Asking for More

This week in San Jose, at NVIDIA's GTC keynote, Jensen Huang told the audience something suppliers usually only hear in private procurement meetings: NVIDIA needs more capacity for copper cables, more capacity for optical chips, and more capacity for co-packaged optics.

"For the first time, we will scale up with both copper and co-packaged optics."

Co-packaged optics - CPO - means building the laser-driven optical connections directly into the switch or processor package instead of plugging in separate modules - the clearest signal yet that the wiring inside AI data centers is converting from electrons to photons. And two weeks before the keynote, NVIDIA put money behind the words: on March 2 it announced $4 billion of strategic investments - $2 billion each into Lumentum and Coherent - alongside multi-year purchase commitments.

This is the third and final part of our photonics series. Part one explained the technology; part two mapped the supply chain, layer by layer, from crystal wafer to finished data center. Today: the stocks themselves.

We used Barebone to pull the March 17 closing prices and the latest filed quarter for every major listed photonics name, then lined them up by layer: who sells what, to whom, at what growth rate, and at what price.

The headline: NVIDIA is down 2.5% in 2026. AXT is up 171%. Applied Optoelectronics is up 148%. Lumentum is up 76%. The AI trade didn't stop this year. It rotated - out of the company everyone owns, into the supply chain almost nobody had heard of.

The Scoreboard

Here is the year to date through tonight's close.

Eight of the nine US-listed names in our roster are beating both NVIDIA and the S&P 500 this year - three of them by more than 70 points. The roster, layer by layer:

Layer	Company	What they sell	The claim to fame	YTD	12-mo
Substrates	AXT (AXTI)	Indium-phosphide crystal wafers	Doubling capacity in 2026	+171.3%	+2,311%
Substrates	Soitec (Paris-listed)	Engineered silicon-on-insulator wafers	Dominant in SOI	-	-
Laser chips	Lumentum (LITE)	EML lasers, CPO light engines, optical switches	Record 100G/200G EML shipments; $2B from NVIDIA	+76.2%	+851%
Lasers + modules	Coherent (COHR)	Lasers, optics, transceivers	$2B from NVIDIA; datacom book-to-bill above 4x	+33.2%	+267%
Foundry	Tower Semiconductor (TSEM)	Silicon-photonics wafer foundry	Photonics revenue more than doubled in 2025	+17.4%	+253%
Foundry	GlobalFoundries (GFS)	GF Fotonix silicon-photonics platform	The other Western photonics foundry at scale	+23.9%	+12%
Transceivers	Innolight (Shenzhen-listed)	800G/1.6T optical modules	Roughly half of NVIDIA's 800G supply, per industry estimates	-	-
Transceivers	Eoptolink (Shenzhen-listed)	800G/1.6T optical modules	H1 2025 revenue +283%	-	-
Transceivers	Applied Optoelectronics (AAOI)	800G modules and lasers	Guided 2026 revenue above $1B vs $456M in 2025	+147.6%	+312%
Assembly	Fabrinet (FN)	Contract manufacturing	Builds for NVIDIA and the module makers	+9.8%	+126%
Networking	Broadcom (AVGO)	Switch silicon with integrated optics	Tomahawk franchise; also makes EML lasers	-7.2%	+65%
Networking	Marvell (MRVL)	Interconnect silicon, optical DSPs	$3.25B deal for Celestial AI	+6.8%	+29%

Two things jump out before you read a single filing.

First, the further upstream you go - toward wafers and laser chips, where the fewest companies compete - the bigger the move. The bottleneck layers repriced hardest.

Second, the names with the most diversification moved least. Broadcom and Marvell are both genuine photonics players, but optics is one product line inside enormous businesses, so the repricing barely registers in the stock.

The longer view makes the rotation unmistakable. From the start of 2025, Lumentum is up nearly eightfold and Coherent is up about 160%. NVIDIA - the company actually buying all of this - has returned +35% over those fifteen months, against about +14% for the S&P 500. Solid. Forgettable. The market spent 2024 paying for compute. It is now paying for the connections between the compute.

Same Theme, Very Different Businesses

Here is what the comparison actually reveals once you open the filings: these companies are not interchangeable bets on the same trend. They are five different business models wearing one theme.

The pure-play with the customer's money: Lumentum. Lumentum is the most concentrated bet on AI optics among the larger names. Its December quarter, reported February 3: revenue of $665.5 million, up more than 65% year over year, with record shipments of the 100G and 200G EML laser chips that power high-speed transceivers - the engine of this rally in one line item. The backlog tells you about the future: more than $400 million in optical circuit switch orders, plus a new multi-hundred-million-dollar CPO order deliverable in the first half of 2027. "Monopoly" is the word that gets thrown around for Lumentum's laser position; that's too strong - Coherent, Broadcom, Mitsubishi Electric and Sumitomo Electric all make EMLs - but in the highest-speed tiers, Lumentum is the name everyone else is measured against. (Sweden's Sivers Semiconductors is the micro-cap pure-play at the edge of this layer - venture-style risk, venture-style information scarcity.)

The diversified converter: Coherent. Coherent's December quarter: $1.69 billion in revenue, up 17% - but the segment that matters, Datacenter & Communications, did $1.2 billion, up 33.6%, and is now roughly 70% of the company. The stat that stops you: segment book-to-bill above 4x. For every dollar Coherent shipped to data centers last quarter, it booked more than four dollars of new orders. The rest of Coherent - industrial lasers, instrumentation - grows slowly and dilutes the AI exposure, which is partly why COHR trades at a fraction of Lumentum's run.

The assemblers: a profit pool you mostly can't buy. The transceiver layer - where chips become the pluggable modules every GPU rack consumes by the thousand - is dominated by two Shenzhen-listed companies. Innolight, the world's largest transceiver maker, did $3.3 billion of revenue in 2024, up 123%, and industry estimates through 2025 put it at roughly half of NVIDIA's 800G module purchases, with Innolight and Eoptolink together taking about 60% of last year's incremental orders. Eoptolink's first-half 2025 revenue grew +283%. Neither trades on a US exchange. That scarcity is a big part of the AAOI story: Applied Optoelectronics is one of the few US-listed ways to own this layer. It guided 2026 revenue above $1 billion versus $456 million in 2025 - management says capacity, not demand, is the constraint - and the stock is +148% this year. Fabrinet is the quieter version of the same idea: the contract manufacturer that builds modules for NVIDIA and others, winning regardless of which module brand wins.

The foundries: the tollbooth layer. Tower Semiconductor's silicon-photonics revenue went from $106 million in 2024 to $228 million in 2025 - up 115%, with a plan to grow capacity roughly fivefold by the end of 2026. On February 5 it announced a collaboration with NVIDIA to scale 1.6-terabit silicon photonics. Remember: Intel agreed to buy this company for $5.4 billion in 2022 and the deal died on Chinese regulatory approval in 2023. Today the market values Tower well above Intel's old offer, and NVIDIA came to it directly. GlobalFoundries runs the other dedicated Western silicon-photonics platform, GF Fotonix.

The giants in the corner: Broadcom and Marvell. Broadcom builds the Tomahawk switch chips that route all of this light - and increasingly builds the optics into the package. Marvell paid $3.25 billion in December - $1 billion cash, $2.25 billion in stock, plus up to $2.25 billion in earnouts - for Celestial AI, whose "photonic fabric" claims to deliver optical data directly to the compute die. Both are real photonics businesses attached to much larger companies; neither is a clean way to own the theme.

What the Market Is Paying For

Now the uncomfortable column: price.

Lumentum is up +851% in twelve months. AXT - which sells the indium-phosphide wafers the laser chips are grown on - is up +2,311% over the same twelve months, from $1.84 to $44.36. AXT's entire 2025 revenue was $88.3 million, with a $21.3 million net loss. The company is doubling capacity, raised equity in December to fund it, and sits at the single most concentrated chokepoint in the chain. It is also a loss-making substrate vendor whose Chinese subsidiary needs export permits, now valued in the billions. Both descriptions are true. That is what buying a bottleneck at month fifteen of its discovery looks like.

And here is the detail almost nobody has noticed. NVIDIA's March 2 investments were priced at $695.31 per Lumentum share and $256.80 per Coherent share. Tonight Lumentum closed at $649.56 and Coherent at $245.80.

The most informed buyer in the industry - the customer itself, with perfect visibility into its own order book - is underwater on both positions two weeks after writing the checks. Lumentum closed at a record $783.25 on announcement day and has since faded 17%. If you bought the news that morning, you are down meaningfully in a stock whose business is performing exactly as promised. The lesson isn't that the deal was bad. It's that at these prices, flawless execution is the starting assumption, not the upside.

Where the Thesis Breaks

Four honest problems with the photonics trade, in descending order of importance.

One customer is most of the story. The demand wave is real, but it is substantially one company's roadmap. NVIDIA's investments are non-exclusive and it is deliberately funding multiple suppliers at once - Lumentum and Coherent, Tower and its existing partners. The company writing the checks is also engineering away any single supplier's pricing power.

Copper didn't die this week. Listen closely to the keynote: NVIDIA's new rack-scale systems still use copper NVLink inside the rack, with optics extending across racks - Huang explicitly framed copper expansion, optical scale-up and optical scale-out as three parallel tracks. CPO at scale-up is arriving, but on a schedule, with the new photonics switches shipping from mid-2026. A quarter or two of slippage would hit the most expensive names hardest.

The profit pool has a history of evaporating. Optical components are a brutally cyclical, price-competitive industry - ask anyone who held optical names through the telecom bust. Innolight and Eoptolink can manufacture at costs Western module makers struggle to match, and they are racing into 1.6T. AAOI is guiding to more than double its revenue while running near breakeven today - its fourth quarter included an 800G shipment delay over firmware, a reminder that ramps are not formalities.

The tape has already cooled. From the March 2 euphoria close to tonight: Lumentum -17%, Coherent -18%, AAOI -32% from its March 11 peak. The two-week trend across the sector is down, even as the news flow stays perfect. When stocks stop going up on good news, the marginal buyer is already in.

What This Means

Strip out the heat and the comparison gives you a usable map.

Match the instrument to the belief. If your view is "AI data centers will need vastly more optics," the diversified names - Coherent, Fabrinet, even Broadcom - express it with a margin of safety. If your view is "the bottleneck layers stay bottlenecked for years," the pure plays - Lumentum, AXT, AAOI - are the leveraged version, priced as if that's already settled.

Watch the capacity milestones, not the announcements. The next twelve months have concrete, checkable dates: NVIDIA's photonics switches shipping from mid-2026, AAOI's 800G volume ramp in the second quarter and 1.6T late in the third, Tower's fivefold capacity build through year-end, Lumentum's CPO deliveries starting in the first half of 2027. Each one either lands or it doesn't - and the stocks at these multiples will not forgive "it doesn't."

Respect what the entry price already says. The clearest data point in this entire piece is NVIDIA's own: $2 billion into each of two suppliers, at prices the market has spent two weeks declining to pay. The technology transition is about as close to certain as these things get. The question - as always at month fifteen of a rerating - is not whether the light gets built. It's how much of the next five years you're being asked to pay for tonight.

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Data: Barebone | Sources: NVIDIA - Lumentum and NVIDIA - Coherent investment announcements (March 2, 2026), GTC 2026 keynote, Lumentum FQ2 2026 results, Coherent FQ2 2026 results, Applied Optoelectronics Q4 2025 results, AXT Q4 2025 results, Tower Semiconductor Q4 2025 results, Marvell - Celestial AI announcement | Prices as of March 17, 2026 close