LITE Vs. COHR Vs. AAOI Vs. IPGP: Which Photonics Stock Do Retail Traders Prefer?

AI data centers are steering the shift from copper to optical connectivity, putting photonics at the center of investor attention.

• A Stocktwits poll showed Lumentum leading retail interest at 34%.
• Applied Optoelectronics and Coherent seem attractive as well with 32% and 31% of the investors preferring them.
• IPG Photonics trailed at 3% despite a Q2 beat.  

AI data centers are pushing the limits of traditional electrical connectivity, creating a growing opportunity for companies that move information with light instead of copper. Companies including Lumentum (LITE), Applied Optoelectronics (AAOI), Coherent (COHR) and IPG Photonics (IPGP) are major beneficiaries of this structural shift. 

Retail investors appear divided over which optical technology suppliers will benefit most from that shift.

Retail Investors Pick Their Photonic Favorites

A recent Stocktwits poll placed Lumentum at the front of the group with 34% of the vote, followed closely by Applied Optoelectronics at 32% and Coherent at 31%. IPG Photonics received only 3%, highlighting the market's stronger focus on businesses tied directly to AI networking.

Lumentum Leads The Race

Lumentum enters its Aug. 11 fiscal fourth-quarter (Q4) results with the largest share of retail enthusiasm. Its portfolio includes indium phosphide laser technology and high-speed optical modules, products positioned to support the rapid deployment of 800G and 1.6T networking inside large-scale AI facilities.

Analysts see $987.7 million in revenue with earnings of $2.97 per share. Lumentum stock inched 0.2% higher overnight, ahead of Tuesday. 

Applied Optoelectronics Gains Momentum

Applied Optoelectronics has strengthened its case with a record $191.9 million in second-quarter revenue, an 86% surge year-on-year. The company also delivered adjusted earnings of $0.06 per share, beating the market forecast of $0.01. Its U.S.-based production of advanced optical transceivers has benefited from strong demand among major cloud operators.

On Friday, Northland increased its price target for AAOI to $120 from $57.50 while keeping a ‘Market Perform’ rating on the stock. The firm said revenue from 800G and 1.6T products would need to grow nearly five times again in the fourth quarter to reach its $1.1 billion revenue forecast. 

Applied Optoelectronics stock traded over 2% lower overnight, heading into Tuesday. 

Coherent Remains Close Behind

Coherent held nearly as much retail support as Applied Optoelectronics ahead of its Aug. 12 Q4 report. Analysts anticipate earnings of $1.62 per share, representing 62% year-on-year growth. 

The company also has substantial exposure to optical transceivers and VCSEL laser arrays used in high-speed computing networks. Coherent stock ticked 0.1% higher overnight, ahead of Tuesday. 

IPG Takes A Different Route

IPG Photonics was chosen by just 3% of the respondents despite exceeding Q2 earnings expectations. The company earned $0.58 per share versus a $0.39 per share consensus estimate on $278.6 million of revenue. 

Investors appear to view its industrial fiber-laser business and battery-welding exposure as less direct beneficiaries of the AI networking buildout. IPG Photonics stock traded 1% higher overnight, ahead of Tuesday. 

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