Optical stocks have become the hottest trade in the AI space: Lumentum, LITE, is up +1,137% over the last 12 months, the 2nd-best performing stock in the S&P 500. Over the same period, Applied Optoelectronics, AAOI, is up +551%, Coherent, COHR, +282%, Corning, GLW, +223%, and Fabrinet, FN, +176%. This marks a massive outperformance of the Nasdaq 100, which returned +23%. These companies make optical components that use light instead of traditional copper wiring to move data inside AI data centers. This technology has gained popularity as AI infrastructure demands faster and more efficient communication. In early March, Nvidia, NVDA, announced it would invest $2 billion each in Lumentum and Coherent. Optical stocks are the latest beneficiary of the AI boom.(The Kobeissi Letter)