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Applied Optoelectronics Inc. (NASDAQ:AAOI) rose 7.52 percent on Wednesday, finishing at $175.13 per share. The rally was fueled by investor optimism around AI sector expansion, including reports that OpenAI is pursuing a lease deal. Nvidia CEO Jensen Huang endorsed the optics industry's role in AI infrastructure at Computex Taiwan, stating that scaling strategy involves "copper as long as you can" followed by optics for further and cross-system scaling.
Why it matters
Optoelectronics suppliers benefit from expected data center buildout tied to AI expansion. Rosenblatt Securities forecasts that key players in the sector will expand production capacities by approximately 12x through 2030 to meet growing AI demand. This suggests sustained investment opportunity in optical networking hardware as a critical layer of AI infrastructure.
What to watch
Applied Optoelectronics rallied alongside peers including Marvell Technology, Credo Technology Group, Coherent Corp., and Lumentum Holdings. The sector's near-term growth depends on whether hyperscalers (large AI cloud providers) and chip makers commit to the capacity expansions Rosenblatt outlined through 2030.
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