Counterpoint warns China transceiver ban would hurt U.S. AI giants

Nvidia has committed at least $6.5 billion to photonics companies over the three months prior to May 2026, including $500 million to Corning for advanced optical connectivity solutions and $2 billion each to Lumentum, Coherent and Marvell, according to CNBC. The impact has been significant, with Marvell shares gaining 183.4% year to date, while Lumentum, Corning and Coherent have advanced 142.5%, 68.8% and 60.3%, respectively. Goldman Sachs projects the total addressable market for optical networking to grow from roughly $15 billion in 2026 to about $154 billion by 2028, a more than ninefold increase. Adoption of co-packaged optics is expected to accelerate starting in 2027, reaching roughly 20% to 30% penetration by 2028, while Mordor Intelligence estimates the global photonics market will reach $1.46 trillion by the end of 2026. Investors seeking diversified exposure can consider the Roundhill Photonics & Optics ETF LYTE, with $254.2 million in assets under management across 19 holdings; the KraneShares Photonic and Optical ETF LUMA, with $9.76 million in net assets; and the Tema Photonics & Optical ETF LAZR, with $94 million in net assets across 27 companies.

Amphenol's IT datacom business, which represented 43% of the company's total sales in the second quarter of 2026, saw revenues surge 89% year over year and 63% organically, with management saying the AI revenue run rate has reached roughly $10.5-$11 billion. Management noted that virtually all of the 22% sequential IT datacom growth in the quarter came from AI-related products, as customers require more copper, optics and power for larger, more complex AI clusters. The company's acquisition of CommScope contributed more than $1.2 billion in sales in the quarter, with CommScope's IT datacom business nearly doubling year over year; management expects that market to account for just under half of CommScope's 2026 sales, compared with roughly one-third in 2025. Amphenol faces tough competition from TE Connectivity, whose Digital Data Networks sales rose 34% year over year in the third quarter of fiscal 2026 with bookings up more than 70% year to date, and from Marvell Technology, whose data-center revenues increased 46% year over year to $2.17 billion in the second quarter of fiscal 2027. Amphenol shares have risen 16% year to date, trailing the broader Zacks Computer and Technology sector's 17% gain, and trade at a forward 12-month price/earnings of 25.32X versus the sector's 20.38X, while the Zacks Consensus Estimate for earnings stands at 72 cents per share, up 5 cents over the past 30 days and implying 53.19% growth.

Jim Cramer told Mad Money viewers to wait for Corning Incorporated to fall further before trimming or holding, citing the company's at-the-market selling program. Corning disclosed on September 11 that it had entered an agreement with Goldman Sachs to sell up to $2 billion of common stock through an at-the-market offering, with proceeds intended for general corporate purposes. The prospectus assumes raising the full $2 billion at $165.96 per share would require issuing 12,051,097 shares, increasing shares outstanding from 861,388,331 to 873,439,428. The offering came as Corning's optical business remained strong: at a September 9 Citi conference, CFO Ed Schlesinger said optical demand was very strong and orders continue to pick up, and second-quarter Optical Communications sales rose 32% year over year to $2.07 billion while core sales increased 17% to $4.74 billion. The bear case centers on execution, as Corning targets a $10 billion scale-up photonics business by the end of the decade tied largely to adoption of NPO and CPO technologies, and expects full-year 2026 capital expenditures of approximately $2 billion compared with $754 million spent in the first half of the year.