To The Moon

$Lumentum(LITE)$ surged 8% this week, is up +143% YTD. $COHERENT(COHR)$ added +19% this week and continues to build momentum.

J.P. Morgan just raised LITE's target from $565 → $950. COHR from $245 → $300. Both: Overweight.

Why optical is back in the spotlight this week?

JPM, Goldman, the OFC data: The AI infrastructure buildout is accelerating, not slowing. CPO and OCS are no longer 2028 stories — they're 2H 2026 revenue. The market is still pricing these companies like boring legacy optical hardware companies. That's the mispricing. Memory started repricing six months ago. Optical is repricing now.

1. Memory prices just confirmed the AI hardware supercycle is real. Samsung reported Q1 earnings that demolished estimates. DRAM pricing: +103% quarter-over-quarter. NAND: +87% QoQ. Goldman Sachs raised Samsung's target to ₩285,000. The memory upcycle isn't a thesis anymore — it's a line item.

2. The biggest optical components conference of the year (OFC) just ended. OFC is where every major player in photonics shows their roadmap. This year's message was unambiguous: the "future technology" conversations from previous years are now purchase orders. Customers are signing contracts. Capacity is being booked years out.

What is optical module? Why does this matter?

You know how highways get congested when too many cars try to use them at once?

Data centers have the same problem. Millions of AI calculations are happening every second — and all that data needs to travel between chips, between servers, and between buildings at insane speeds.

Optical modules are the solution. Light travels faster. It uses less power. It doesn't generate as much heat.

Every time you use ChatGPT, watch a Netflix recommendation, or ask an AI assistant anything — your request flows through optical modules, probably multiple times.

Optical modules are the highways of AI infrastructure. And right now, those highways are being rebuilt from scratch.

Two technologies you need to know

Analysts keep throwing around "CPO" and "OCS." Here's what they actually mean:

CPO (Co-Packaged Optics) Traditional optical modules sit separately from the chips they serve — connected by short copper wires. CPO moves the optical module directly next to the chip it's talking to. Less distance = less energy lost = faster = cheaper to run.

OCS (Optical Circuit Switching) Traditional data centers use electronic switches to route traffic. OCS replaces those with optical switches — routing data as light, not electrons. Faster reconfiguration, lower latency, lower power.

Lumentum alone is on track to do $400M annualized in OCS revenue by H2 2026 — accelerating to $1B+ annualized in 2027 — backed by a multi-year, multi-billion dollar contract with a single hyperscaler.

Would you add these two optical stocks in your watchlist?

J.P. Morgan's summary in one line: LITE is the higher upside, higher risk bet. COHR is the "buy the whole sector without picking the winning horse" play.

Questions

Q1: Which optical module name looks most interesting to you right now?

• A. LITE — high conviction on the multi-year CPO/OCS story, willing to hold through volatility

• B. COHR — broader exposure, more predictable, Nvidia LTA gives visibility

Q2: Are optical modules the next memory — a structural investment theme for the next 2-3 years?

Drop your comments below to win tiger coins.

And if you're already in either name — what's your entry and how are you thinking about sizing given the macro uncertainty?