Applied Optoelectronics Surges 12%, Lumentum Jumps 11% as CoreWeave’s Results Revive AI Trade; Coherent Climbs 7%

Optical networking stocks are rallying sharply as CoreWeave (NASDAQ:CRWV) pulls investors back into AI-related shares. Applied Optoelectronics (NASDAQ:AAOI) stock changed hands at $54.03, up 12%, shortly after the open. The company guided on November 5 for Q4 2026 revenue of $385 million to $420 million and disclosed a multi-year agreement with a Tier 1 hyperscale datacenter customer.

Lumentum (NASDAQ:LITE | LITE Price Prediction) stock is trading at $651.43, up 11%. Meanwhile, Coherent (NYSE:COHR) stock is at $228.62, up 7%. All three companies make the optical transceivers and lasers that move data between AI chips and servers over fiber, so their fortunes track data center spending.

CoreWeave’s Results Reignite AI Infrastructure Buying

CoreWeave reported Q3 2026 results that beat expectations after the close on November 10, and the graphics processing unit (GPU) cloud provider raised its 2026 guidance. A plan at CoreWeave to fund growth through contract financing and upfront customer payments eased fears about how the AI expansion gets paid for. Chip stocks, along with data center and memory names, are climbing on the update, with Coherent and Lumentum among the notable gainers.

The rebound comes as the Chicago Fed’s Austan Goolsbee called the latest inflation report “borderline disturbing” while the Fed weighs more rate hikes. That background turns the move in Applied Optoelectronics and its peers into a test of how much rate risk AI-related stocks can absorb.

Applied Optoelectronics Leads the Bounce After a Steep Slide

Applied Optoelectronics stock fell 7% on November 10, the deepest drop of the three. Coherent stock slid 5% on the same day, and Lumentum stock dipped 2%. All three were already coming off a steep one-month decline, with Applied Optoelectronics down the most.

Bigger swings in both directions at Applied Optoelectronics fit a smaller company that relies on a small number of customers. Lumentum’s rallying runs close to the move in Applied Optoelectronics after the shallowest pullback of the group. Coherent posts the smallest gain of the three, and the company carries an Industrial segment that sits outside the AI spending wave.

Chinese Transceiver Ban Puts Coherent in the Spotlight

Reuters reported on November 10 that Microsoft (NASDAQ:MSFT) is lobbying the Trump administration to drop a planned ban on new Chinese optical transceivers. The Federal Communications Commission (FCC) is working on the ban over security concerns. Chinese companies make about two-thirds of the world’s transceivers, according to Counterpoint Research, and the news agency named Coherent as a U.S. maker that could fill the gap.

Coherent CEO Jim Anderson stated on the company’s November 4 call that calendar 2027 is “basically booked out” and that customers are already booking calendar 2028. That suggests a ban may add pricing power for Coherent more than near-term volume. Two Reuters sources said the FCC is weighing a 3.2-terabit-per-second threshold that would hit faster parts not expected to ramp until 2028. Whether the ban happens remains open.

How Applied Optoelectronics Stacks Up Against Lumentum and Coherent

Applied Optoelectronics is the smallest of the three, a vertically integrated transceiver maker that builds its own lasers and also sells into cable TV broadband networks. Lumentum focuses exclusively on optical components and systems, with pump lasers and optical circuit switches leading its growth.

The most diversified of the group is Coherent, spanning datacenter optics, industrial lasers and engineered materials such as indium phosphide and silicon carbide. Those differences help explain why Applied Optoelectronics tends to swing harder than its larger peers (we covered seven AI infrastructure suppliers like these, from optical to power to cooling, in a free report you can grab here).

What Comes Next for the Optical Rebound

Applied Optoelectronics faces the question of whether it can bring its Texas capacity online fast enough, after the company disclosed a seven-month delay in its Phase 2 expansion tied to electrical power and construction issues. Applied Optoelectronics’ Q3 profit under generally accepted accounting principles (GAAP) depended on $8.2 million of other income, since the company posted an operating loss of $1.44 million.

Optimists can point to Coherent’s Datacenter & Communications revenue, which grew 79% year over year (YoY) in Q1 FY2027, and to Lumentum’s Q2 FY2027 revenue guidance of $1.575 billion to $1.625 billion. On the bear side, a steep one-month decline, inflation pressure that could keep rates higher and an open FCC ruling all weigh on the group. Traders may prefer to keep their memory/storage stock exposure smaller until the FCC’s ruling on Chinese transceivers settles.

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