Optics stocks are getting hit hard at midday Tuesday as a risk-off wave washes through AI hardware names. Lumentum (NASDAQ:LITE | LITE Price Prediction) is down 10.1%, Corning (NYSE:GLW) is off 8.2%, and AXT (NASDAQ:AXTI) is down 12.5%. Lumentum last traded near $877, AXT near $84.
Anthropic Numbers and a WSJ Bombshell Trigger the Rotation
The catalyst is largely macro, not optics-specific in origin.
Anthropic told investors over the weekend that its annualized revenue reached $65 billion at the end of July, a huge number but below the whisper figures circulating in Silicon Valley. On the All In Podcast, Gavin Baker said he had heard Anthropic’s ARR was over $80 billion. Reuters then reported the company is estimating 2028 revenue of $190 billion to $200 billion, again a massive growth rate but likely behind buyside models. Baker and David Sacks said on the same show they expected Anthropic to exit next year at an ARR of $400 billion to $500 billion.
Sacks and Baker don’t speak for all of Silicon Valley, but their optimism vs. published figures is a disconnect that likely reflects what has been ‘priced into’ stocks versus what was just announced. Recent ARR figures reported for OpenAI (about $40 billion), are also ‘disappointing’ versus the amount of spend the company is spinning up.
Layered on top, the Wall Street Journal detailed how AI infrastructure liabilities are ballooning off the books. “Nine top tech companies had some $3 trillion of off-balance-sheet commitments mostly related to AI, according to a Wall Street Journal analysis of footnotes in their most recent securities filings. Those obligations are growing faster than traditional ‘capex,’ which totaled about $600 billion over the past year they reported, and were about triple what the companies owe under their outstanding leases and long-term borrowings.”
That capex is exactly what feeds the optics supply chain, and we profiled seven of the non-chip suppliers riding it in a free report here. Rates are not helping either. The 30-year Treasury hit 5.31% on Monday, a fresh multi-year high that pressures every long-duration growth name.
A Rotation Driven by Positioning
Nothing has changed about the indium phosphide picture in 24 hours. Yesterday, AXT led the group higher on reports of InP shortages and price hikes, dragging Coherent and Lumentum with it (our coverage here). The stocks that ran hardest into today are giving back the most. Lumentum is still up 19% over the past week and 163% year to date. AXT is up 109% over the past month and 487% year to date. Corning is up 98% year to date. That is a lot of profit to defend on a risk-off day.
One added weight on the group is Fabrinet (NYSE:FN), which reported after Monday’s close and is down about 20% despite a clear beat. Fabrinet posted record Q4 revenue of $1.316 billion, up 45% year over year and above the guidance range, non-GAAP EPS of $4.10 versus $2.65 a year ago, and full fiscal 2026 revenue up 36% to $4.64 billion. Fiscal Q1 2027 guidance is $1.375 billion to $1.425 billion. Investors appear to be reading that as conservative for a stock that had run hard, and on a day like this that is enough.
The fundamentals under Lumentum, Corning, and AXT remain intact. Lumentum guided Q1 FY2027 revenue to $1.225 billion to $1.275 billion with the CEO saying the company is “reaching our target model more than a quarter ahead of schedule.” (see Lumentum’s Q4 FY2026 8-K filing on SEC.gov). Corning upgraded its Springboard Plan to a $20 billion annualized run rate by end of 2026 and $40 billion by end of 2030. AXT posted Q2 revenue of $47.59 million, up 165% year over year.
What to Watch
Watch whether investors continue broadly rotating. A look at an S&P 500 heat map tells the story today. Semiconductors are down across the board, and most software is up. We’ve seen this rotation play out again and again. Likewise, investors are rotating to sectors like Healthcare, Industrials, Consumer Defense, Energy, and Financials that are largely seen as defensive. Nothing has ‘changed’ with optics since yesterday, but investors are repositioning based upon a higher level of fear from both reporting and rising interest rates.
If the 30-year gives back some of its move, expect the optics group to stabilize. If yields press higher, the profit-taking has more room to run.
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