$LITE

Applied Optoelectronics (AAOI) shares rose about 13% after it reported Q2 2026 GAAP revenue of $191.9M, up from $103M a year earlier, and shifted to non-GAAP net income of $5.5M from a $8.8M non-GAAP loss. Coherent (COHR) gained about 13% and Lumentum (LITE) about 8% as AI-linked photonics stocks rallied amid a weaker July jobs report and lower Fed hike expectations.

The article says AI optics supply is constrained by China-controlled export licensing for indium-phosphide wafers used in data-center lasers. Lumentum (LITE) agreed to pay AXT (AXTI) $87M for six years of wafer supply, but AXT’s shipments depend on permits from Beijing’s Ministry of Commerce. It cites Reuters on possible FCC rules limiting Chinese optical transceivers and notes large stock swings for LITE, COHR, and AAOI.

MarketWatch discusses geopolitical and supply-chain risks for optical transceiver components, focusing on AXT’s China-linked wafer production, export permits, and stakes in Chinese suppliers. It contrasts with IQE’s turnaround and guidance, and Korea Zinc’s U.S. smelter plans. Ahead of earnings, Lumentum (Aug. 11) and Coherent (Aug. 12) are forecast to see sharp revenue growth. LightCounting says 2026 demand exceeds supply and the squeeze may last into mid-2027.

Lumentum (LITE) reported fiscal Q3 revenue of $808.4M, GAAP net income of $144.2M, and non-GAAP net income of $225.7M, or $2.37 per diluted share. Non-GAAP gross margin rose to 47.9%. Q4 guidance calls for $960M to $1.01B revenue and non-GAAP EPS of $2.85 to $3.05. Analysts at Barclays, JPMorgan, and Citi kept bullish ratings and raised/maintained price targets.

The article says the FCC is drafting a rule to ban new Chinese optical transceivers, citing China’s 50%+ share of global supply. It highlights five US-listed optics/interconnect stocks that could benefit, including AAOI (Q1 FY26 revenue $151.14M, +51.4%), COHR (Q3 FY26 revenue $1.81B, +20.5%), and LITE (Q3 FY26 revenue $808.4M, +90.1%).

Viasat, Inc. shares rose 6.1% to close at $85.99 on Thursday, reaching about $11.9 billion market cap, with volume of 429,068 shares. The gain tracked a broader move in communication equipment peers, including LITE (+5.2%) and VIAV (+4.0%), with no specific catalyst cited.

Roundhill Investments says it will launch the Roundhill Photonics and Optics ETF (LYTE) on Thursday, targeting optical networking and photonics tied to AI data centers. It cites Nvidia’s $6.5 billion photonics commitments since March and Goldman Sachs’ 2026-2028 optical networking TAM rising from $15B to $154B. Competitor Tema’s LAZR launched June 30.

Reuters reports the US FCC is drafting a ban on imports of new Chinese-made optical transceivers used in AI data centers, citing national security. Officials said it could bar new models from Chinese manufacturers and take effect before end-2026. Reuters also says Western suppliers Lumentum and Coherent rely on indium phosphide, with China controlling most supply.

Counterpoint Research says Chinese optical module makers supply about two-thirds of global transceivers and Western capacity cannot fully replace it within 12 to 24 months. A proposed FCC import ban on new Chinese optical transceiver models could raise costs and delay AI cluster deployments for hyperscalers. U.S.-listed Coherent, Applied Optoelectronics, and Lumentum rose on the report; AMD fell after Musk flagged buying Nvidia chips for SpaceX.

Reuters reports the Trump administration is drafting an FCC measure to ban imports of new Chinese-made data center optical transceivers. Officials aim to publish later this year, with effect afterward, citing risks of data theft, malware, or disruption. Shares rose for Lumentum, Coherent, and Applied Optoelectronics; Innolight could be affected.