Optical Networking Is AI's Most Overlooked Bottleneck. Here's Why This Nvidia-Backed Company Is the Stock to Own.

The article argues that optical networking is becoming a critical AI infrastructure bottleneck as data centers shift from copper to faster fiber-optic components to handle AI and cloud workloads. It highlights Coherent (COHR) as a key beneficiary because it supplies optical transceivers and related products, and notes Nvidia’s strategic support via a $2 billion investment in March. Coherent’s optical segment is described as its main growth engine, with revenue up 23% in fiscal 2025 and analysts forecasting 31% CAGR revenue growth through fiscal 2028. EPS is expected to turn positive in fiscal 2026 and compound at 52% over the next two years. The piece is broadly bullish on the long-term demand outlook for AI optics, but flags valuation as a risk, with Coherent trading at 65x next year’s earnings.