The end of AI is light: A 10x stock industrial chain map most people overlook

Compiled & Edited: TechFlow

Host: Brian, former employee at Target & Amazon

Podcast: BWB - Business With Brian

Original Title: Millionaires are Hitting These 10X Stocks HARD!

Air Date: June 21, 2026

Key Takeaways

The real bottleneck for AI data centers isn't a single chip winner, but the entire photonics supply chain that converts electrical signals into optical signals and transports massive amounts of data. Brian's core thesis: as the industry upgrades from 800G to 1.6T and eventually towards 3.2T, the companies capturing the outsized returns are often not the hottest names in the spotlight, but essential suppliers like Corning, Amphenol, and Ciena that all giants must rely on, along with upstream materials and testing segments. This podcast provides a comprehensive breakdown of the complete photonics supply chain and highlights the golden high-growth stocks you need to watch closely before the Wall Street herd rushes in.

Key Insights Summary

Why AI Data Centers Must Transition to Optical Communication

• "Copper is hitting a physical limit. Every data center will eventually have to transition to optics. China has already proven to the entire industry that this path can go even further."
• "Once the data transmission distance exceeds about 3 feet, copper quickly loses its advantage, generating more heat and consuming more power; optics can solve both problems simultaneously."
• "Transitioning from electricity to optics – that's the core meaning of photonics technology."

Why Investment Opportunities Often Lie in the Supply Chain, Not Star Companies

• "Once a new technology is proven viable, the greatest wealth often flows first to the companies that all participants must rely on, not just the single name making headlines."
• "Glass, lasers, connectors, materials, and test equipment – none are optional. This is where the most value lies in the photonics supply chain."

Key Points on Corning

• "Corning's optical communications revenue grew 36% last quarter, but corresponding profit grew 93%, indicating that pricing power and economies of scale are materializing simultaneously."
• "Corning has become a designated core supplier simultaneously for Meta, Amazon, Google, Microsoft, OpenAI, and Nvidia. No other competitor in the world has a client list like this, and these relationships have translated into multi-year locked-in revenue."
• "Meta has committed up to $6 billion, Amazon has signed multi-billion dollar contracts, and two other hyperscale clients have signed agreements of similar magnitude. This revenue is locked in years before the fiber is even produced."

What Amphenol and Credo Represent Respectively

• "If you want a broader, less volatile, and reasonably valued optical interconnect target, Amphenol is a name worth watching long-term."
• "Credo serves as a bridge between the old world and the new. It both maximizes the lifespan of copper cables within racks and extends its reach into the optical communication side."
• "Credo's risk is also clear: extremely high customer concentration. If just one major customer pauses procurement, the stock price could take a significant hit."

Opportunities in the System Layer, Upstream Materials, and Testing Segments

• "Ciena's value lies in enabling existing fiber to carry more data without needing to dig and lay new cables."
• "AXT sits further upstream, being a scarce supplier of critical wafer materials for optical lasers, but it also faces significant risks related to Chinese export licenses."
• "VEO Solutions functions more like a 'pick-and-shovel' seller in the optical communication world. Whether it's fiber optic links, transceivers, or system equipment, they all need testing before deployment and monitoring after operation. VEO sells the test tools that all this equipment must go through."

Thematic Allocation and ETF Selection

• "If you don't want to pick individual companies yourself, there are now pure-play photonics thematic ETFs that cover this trend with one click."
• "However, these funds are newly established, with small AUM and relatively high expense ratios. They are suitable for a watchlist first, not for blindly chasing highs."

China Has Raised the Ceiling for Fiber Optic Transmission Yet Again

Brian:

Engineers recently lit up a single strand of glass fiber in China, achieving a data-carrying capacity five times higher than existing levels anywhere else in the world. This isn't a newly laid line or massive excavation; it's about directly activating a single fiber thinner than a hair within pre-existing underground cables. What used to take about half an hour to transfer the entire Library of Congress's data can now be done in about 5 minutes.

This technology hasn't really been deployed in the US yet, highlighting the rapid pace of evolution in this field. AI is generating a data deluge far exceeding current transmission capabilities, and US data centers are increasingly lacking this capacity. All hyperscale cloud providers will eventually need it, and they won't build the entire system from scratch; they will buy it.

They are buying glass, lasers, and chips that convert electricity to light. And there are very few suppliers that can truly provide these components. Having spent many years on the procurement side of the supply chain, my experience tells me the pattern of these opportunities rarely changes. Once a new technology is proven viable, the greatest wealth often flows first to the companies that all participants must rely on, not just the single name making headlines.

Why Photonics Technology Becomes a Core Variable Now

Brian: Today, I want to break down the entire photonics supply chain for you and explain the corresponding listed companies at each layer. Why photonics technology, and why now?

The answer boils down to one hard constraint. Inside data centers, all chips need to communicate with each other. Over short distances, copper cables are still the winner. But once you want to transmit data beyond about 3 feet, copper's problems quickly become apparent: the longer the distance, the worse the heating and the higher the power consumption.

Optics solves nearly all these problems at once. It transmits much further, generates less heat, and consumes only a fraction of the power of copper solutions. This transition from electricity to optics is the core significance of photonics technology.

More importantly, this inflection point is now very clear. Every data center is upgrading from 800G connections to 1.6T, and even 3.2T is on the table. Simultaneously, the fiber optic line from China mentioned earlier has pushed the industry's ceiling upward once again.

If we break it down, the most critical layers include: the glass, fiber, and cables that actually carry the optical signal; the connectors that tie everything together; the system equipment responsible for lighting up the fiber and transmitting data between buildings and countries; and the underlying materials and test equipment. I've covered chips, lasers, and silicon photonics specifically in previous videos, so today I'll focus on these often-overlooked but equally profitable segments.

In these groups, I'll name names worth putting on your watchlist. But let me be clear upfront: many of these stocks have already run up significantly. Favorable entry points will likely require waiting for a pullback.

Why Corning is the Top Name to Watch in the Glass and Fiber Layer

Brian:

Let's start with the most fundamental layer: glass. The first name is Corning. This is a 175-year-old materials company that actually draws the fiber optic cable – the "glass thread" I mentioned at the start of the video. It holds about a 20% share of the global fiber optic market, making it a very core player.

Where Corning truly pulls ahead is in technology. Its latest generation of fiber can pack roughly twice the number of cores into the same physical space as standard cables – exactly the capability severely congested AI data centers need most. Its bend-insensitive glass is also difficult for competitors to replicate. Add to that the world's largest fiber optic factory and US domestic supply compliant with "Buy America" rules, and these combined factors form its true moat.

This is why Corning has simultaneously become a designated core supplier for Meta, Amazon, Google, Microsoft, OpenAI, and Nvidia. No other competitor in the world commands a client list like this. And these aren't just "great collaboration" relationships; they've translated into multi-year locked-in revenue.

Industry demand for fiber optic cables is currently growing at about 22% to 25% annually, but the entire industry's new supply capacity is only about half that growth rate, with lead times stretching to over 60 weeks. Consequently, hyperscale clients are booking production capacity years in advance, even pre-paying to secure it. Meta has committed up to $6 billion, Amazon has signed multi-billion dollar contracts, and two other hyperscale clients have signed agreements of similar magnitude. This revenue is locked in years before the fiber is even produced.

What impresses me most is the profit leverage. Corning's optical communications revenue grew 36% last quarter, but the segment's profit grew 93%, a growth rate more than double revenue. This is what pricing power and economies of scale look like simultaneously. At the company level, its operating margin has also increased from around 8% two years ago to over 16% now, with management targeting 20% by the end of this year.

Of course, we must also acknowledge the reality: this story is no longer a secret. Corning currently trades at a PEG ratio near 3 and a price-to-sales ratio of about 9x, which is not cheap for a materials company. So, if you want the most stable, least dramatic way to gain exposure to the fiber layer, Corning is suitable, but a more reasonable approach is to wait for a more decent pullback.

Core Companies in the Interconnect Layer: Amphenol and Credo

Brian:

Next is the interconnect layer – the layer that actually connects all the components. The first name is Amphenol. It's a remarkably low-key giant making high-speed connectors and cable assemblies, both copper and optical. Today, you can find its products in virtually every new AI server rack.

The key to understanding Amphenol is that it's essentially a highly efficient acquisition machine. In January this year, it spent $10.5 billion to acquire CommScope's entire fiber optic connectivity business, transforming overnight from a connector company into a serious optical fiber player. Now, the AI data center business has become the core engine of the entire company, its largest single segment, posting organic growth of over 80% last quarter.

Its order backlog has also reached a record $9.4 billion, with new orders still coming in faster than shipments. As quarterly revenue jumped from around $4 billion to just over $7 billion, its operating margin wasn't dragged down but actually expanded from 22% to nearly 28%.

This is particularly noteworthy. Normally, a $10+ billion acquisition would put integration pressure on a company for a year or two, usually causing margins to decline first. But Amphenol's margins actually improved, indicating a strong ability to quickly integrate acquired companies into its own high-standard operational framework. As a result, this large deal didn't become a burden, but rather a profit enhancer.

What's rarer is that its valuation isn't absurd yet. Amphenol's PEG ratio is only about 0.7, with a price-to-sales ratio around 7x. For a company growing this fast, such valuation isn't common. So, if you want a broader, less volatile, and reasonably valued optical interconnect target, Amphenol is a name worth watching long-term.

The second name in this interconnect layer is Credo Technology. It plays a role more like a bridge between the old world and the new. On one hand, it uses low-power chip technology to squeeze maximum transmission capacity out of copper cables within the rack. On the other hand, it's also developing optical communication chips and cables, seamlessly taking over when signals need to travel further.

It recently acquired a silicon photonics company, filling out its end-to-end product stack up to 1.6T, and is now shipping to all of the top five US hyperscale cloud providers. Its growth is quite staggering: quarterly revenue went from $135 million to $437 million in just six quarters, more than tripling.

Another telling indicator is its gross margin of about 68%. This number is more typical of a software company than a hardware one. Concurrently, its operating margin has nearly doubled to 37% as scale increases. Management's revenue guidance for the next fiscal year still points to over 80% growth.

But the risk here is very specific and must be taken seriously. Although it supplies all five major clients, just three of them account for 88% of the company's revenue. If just one hyperscaler slows down procurement, this stock could be heavily penalized by the market quickly. Compounding this, insiders have been consistently selling shares during the uptrend. With the company's current price-to-sales ratio around 35x, the market is essentially pricing in "almost everything continuing to go right." The PEG ratio near 1 indicates strong growth, but this type of stock is more of a high-conviction target to consider only after a deep pullback.

The Truly Key Player in the System Layer: Ciena

Brian:

Moving up the stack is the system layer, which lights up the fiber and moves data between buildings and countries. The most critical name here is Ciena. It's the leader in western coherent optics. Its proprietary WaveLogic technology is the world's first solution to pack 1.6T of data into a single wavelength optical signal. Think of this as a "capacity expansion cheat code without digging," because it allows existing fiber to carry significantly more data without requiring new cable to be laid.

And this isn't just a lab demo. In just two quarters, this single product has been adopted by 49 clients. Simultaneously, its position with major customers is very strong. Its relevant solutions are already used by three of the top four hyperscale cloud and cloud service providers. Cloud clients now contribute nearly half of the company's revenue.

For me, the most critical data point is still the order backlog. Last quarter, Ciena's backlog increased by about $2 billion in 90 days, reaching nearly $7 billion. Virtually all of it is scheduled for delivery next year, meaning it has already locked in over a year's worth of revenue.

As revenue hit new all-time highs, growing 40% year-over-year, its operating margin doubled from under 8% to over