Photonics stocks Coherent Corp., POET Technologies, Lumentum Holdings, and Applied Optoelectronics rose 1% to 1.7% in overnight trading late Wednesday after Alphabet reported a 100% year-over-year increase in capital expenditures for the June quarter and raised its full-year spending forecast. The rally was driven by expectations of stronger demand in the AI infrastructure segment, as Alphabet's increased investment signals continued expansion of data centers and optical networking components. The photonics sector gains aligned with broader advances in chip and memory semiconductor stocks, reflecting the ongoing Big Tech capital expenditure boom focused on AI infrastructure buildout.
Alphabet Raises 2026 CapEx Guidance to $195 Billion-$205 Billion
Alphabet on Wednesday announced its June quarter capital expenditures doubled from a year ago to $44.92 billion, bringing total investment in 2026 so far to $78.6 billion. The company updated its full-year CapEx guidance range to $195 billion to $205 billion, up from the previous estimate of $180 billion to $190 billion. The Search and cloud giant stated most of the investment will go toward expanding AI infrastructure and building new data centers.
Photonics Suppliers Serve AI Data Center Optical Networking Market
Coherent, POET, Lumentum Holdings, and Applied Optoelectronics are key suppliers in the optical networking and photonics market. Coherent sells lasers, optical transceivers, silicon photonics and advanced materials used to connect GPUs across AI clusters. Lumentum and Applied Optoelectronics supply high-speed optical transceivers, lasers and networking components that move data between AI servers. POET develops optical engines and its proprietary Optical Interposer platform designed to make AI optical modules cheaper, faster and more power efficient. Optical connectivity is increasingly viewed as a critical component in scaling next-generation AI data centers.
COHR, AAOI, LITE, POET Stocks Show Mixed Year-to-Date Performance
Shares of the four companies climbed for most of the year before a pullback starting in May. Applied Optoelectronics and Lumentum remain the top performers in the group, with 202% and 125% year-to-date gains, respectively. POET shares are up about 20%, with the stock declining after the cancellation of the company's orders with Marvell in April. On Stocktwits, retail sentiment was bearish for COHR, LITE and POET, and neutral for AAOI as of late Wednesday. A trader wrote that hyperscaler earnings calls remain the key signal for the AI capex trade.
FAQ
What did Alphabet announce about its 2026 capital expenditures?
Alphabet announced on Wednesday that its June quarter capital expenditures doubled year-over-year to $44.92 billion and raised its full-year 2026 CapEx guidance to $195 billion to $205 billion from the previous range of $180 billion to $190 billion.
How did photonics stocks perform after Alphabet's announcement?
Shares of Coherent Corp., POET Technologies, Lumentum Holdings, and Applied Optoelectronics rose 1% to 1.7% in overnight trading late Wednesday following Alphabet's capital expenditure increase and raised full-year spending forecast.
What role do these photonics companies play in AI infrastructure?
Coherent sells lasers, optical transceivers, silicon photonics and advanced materials for connecting GPUs in AI clusters. Lumentum and Applied Optoelectronics supply high-speed optical transceivers, lasers and networking components for data movement between AI servers. POET develops optical engines and its Optical Interposer platform for AI optical modules.
