3 Optical Networking Stocks Retail Investors Are Watching For AI Data Center Growth

Data centre photonics has moved from lab talk to real-world build decisions, and that shift is quietly reshaping who wins and who loses in the AI infrastructure race. Investors now face a rare crossroads where optical networking suppliers could see sentiment reset as copper-based approaches are questioned. This article unpacks that story and walks through three stocks exposed to this news, so you can judge the risk and potential upside for yourself.

The stocks in the list below are just a small sample, and the full screen surfaced 65 more data centre photonics and optical networking suppliers with equally compelling stories that are not covered here. If you want to go straight to the source, use the Data Centre Photonics and Optical Networking Suppliers screener to identify, filter, and analyze candidates that best match your own highest conviction ideas.

Ciena (CIEN)

Ciena is one of the clearest pure plays in this screener, with its optical networking gear and photonic systems sitting right where AI hungry data centres need more bandwidth between racks, buildings, and regions.

"Major cloud providers and a new wave of neo-scalers are aggressively investing in high-capacity, low-latency optical networking infrastructure to support AI workloads, driving multiyear, global network buildouts that should significantly expand Ciena's addressable market and underpin sustained, above-trend revenue growth."

What really matters from here is how one stubborn supply chain bottleneck shapes the gap between that optical demand story and actual margins.

That supply chain friction is exactly what the full narrative for Ciena unpacks, along with how Ciena’s optical story could decouple sentiment from near term execution risk.

Coherent (COHR)

Coherent is one of the purest plays on the shift from copper to photonics in AI data centers, supplying the optical engines, transceivers, and circuit switches that sit directly in the high bandwidth links this screener is hunting for.

Coherent Corp. develops photonics hardware that feeds into data center and telecom networks, with its Datacenter & Communications unit generating about US$5.3b of revenue and Industrial contributing roughly US$1.9b, while the stock carries a market value near US$63.0b.

"The ongoing expansion of AI datacenter infrastructure and high-performance computing is associated with structural growth in demand for advanced optical transceivers (800G, 1.6T, and beyond), optical circuit switches, and related photonics components, which is fueling robust sequential order growth and sustained revenue momentum in Coherent's datacom and communications business."

What investors may want to consider is how a potential future bottleneck in Coherent’s AI optics capacity could reshape the balance between demand strength and long-term margins.

That tension between capacity limits and pricing power is exactly what the full narrative for Coherent unpacks, revealing where Coherent’s AI optics story could be getting underappreciated.

Smartoptics Group (OB:SMOP)

Smartoptics Group builds optical networking gear that plugs directly into the shift from copper to fibre in data-centre and carrier links. Its Computer Networks division generates about $94 million of revenue and the stock is valued at roughly NOK5.1 billion.

Smartoptics Group offers a focused way to gain exposure to data-centre photonics, since its DWDM systems, optical transceivers and software are already being used to connect growing clusters of AI-heavy sites.

"Smartoptics Group anticipates strong future revenue growth from its large account strategy, expecting new and existing large customer accounts to significantly contribute to 2025 revenues and beyond."

What could be especially important from here is how one less visible pressure on these bigger projects feeds through to pricing power and profitability.

Those project pressures are exactly where the full narrative for Smartoptics Group shows whether Smartoptics Group’s momentum is accelerating, stalling, or simply being masked by near term noise.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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