The end of AI is light: A 10x stock industry map most people are overlooking

Compiled & Translated by: Shenchao TechFlow

Host: Brian, formerly worked at Target & Amazon

Podcast Source: BWB - Business With Brian

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

Air Date: June 21, 2026

Key Takeaways

The true bottleneck in AI data centers isn't a single chip winner, but the entire photonics supply chain that converts electrical signals into optical signals and moves massive amounts of data. Brian's core thesis: As the industry upgrades from 800G to 1.6T and even pushes toward 3.2T, the first to capture outsized returns are often not the hottest front-line stars, but 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 the golden high-growth stocks you need to watch closely before the Wall Street herd charges in.

Highlights of Key Insights

Why AI Data Centers Must Transition to Optical Communication

• "Copper is hitting a physical limit; every data center will eventually have to switch to optics. China has already shown 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 all these problems simultaneously."
• "Transitioning from electricity to optics—that's the core meaning of photonics technology."

Why Investment Opportunities Often Lie in the Supply Chain Rather than 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 testing equipment—none can be missing. That's where the most value lies in the photonics supply chain."

Corning's Key Points

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

What Amphenol and Credo Represent Respectively

• "If you want a broader coverage, relatively lower volatility, 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, both squeezing the last bit of life out of intra-rack copper cables and extending into optical communication."
• "Credo's risk is also clear: extremely high customer concentration. If just one hyperscale client pauses procurement, the stock price could take a heavy hit."

Opportunities in System Layer, Upstream Materials, and Testing

• "Ciena's value lies in enabling existing fiber to carry more data without needing to dig up and lay new cables."
• "AXT sits further upstream, a scarce supplier of key wafer materials for optical lasers, but it also faces significant China export license risks."
• "VEO Solutions acts more like the 'pick-and-shovel seller' in the optical communication world because fiber links, transceivers, and system equipment all need testing before going live and monitoring afterward—and VEO sells the tools that all this equipment must pass through."

Thematic Allocation and ETF Options

• "If you don't want to pick individual companies yourself, there are now pure-play photonics ETFs that can cover this theme in one click."
• "But these funds are newly established, small in scale, and have high expense ratios. They're suitable for a watchlist first, not for blindly chasing highs."

China Just Raised the Fiber Optic Transmission Ceiling Again

Brian:

Engineers recently lit up a single strand of glass fiber in China, with data-carrying capacity five times higher than current standards elsewhere in the world. This isn't a newly laid line or a massive dig; it's directly activating a fiber thinner than a hair within an already buried cable. It used to take about half an hour to transfer the entire Library of Congress's data; now, about 5 minutes is enough.

This technology hasn't truly landed in the US yet, which shows just how fast this field is evolving. AI is generating a data tsunami far beyond existing transmission capabilities, and US data centers are increasingly lacking this capacity. Every hyperscale cloud provider will eventually need it, and they won't build the entire system from scratch—they will buy it.

What they buy is glass, lasers, and chips that convert electricity to light. And there are actually only a few suppliers capable of providing these things. Having spent years on the procurement side of the supply chain looking at the industry, my experience tells me the pattern for these opportunities has rarely changed. 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 is Becoming a Core Variable Now

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

The answer boils down to one hard constraint. Inside a data center, all chips need to communicate with each other. Over short distances, copper still wins; but once you want to transmit data beyond about 3 feet, copper's problems quickly emerge. The longer the distance, the more severe the heat and the higher the power consumption.

Optics solves all these problems almost in one go. It transmits further, generates less heat, and consumes only a fraction of the power compared to copper solutions. Transitioning from electricity to optics—that's the core meaning of photonics technology.

More importantly, this inflection point is now very clear. Every data center is upgrading from 800G connections to 1.6T, and 3.2T is already on the table. Simultaneously, that fiber optic cable from China just pushed the industry ceiling higher overall.

Breaking it down, the most critical layers include: the glass, fiber, and cables that actually carry the optical signal; the connectors linking everything together; the system equipment responsible for lighting the fiber and transmitting data between buildings and countries; and the more fundamental materials and testing equipment. Chips, lasers, and silicon photonics themselves I've covered in previous videos, so today the focus is on these often-overlooked yet equally profitable segments.

Within these groups, I'll give you names worth putting on your watchlist. However, I must state upfront that many of these targets have already risen significantly. A truly favorable entry point will likely require a pullback.

In the Glass and Fiber Layer, Why Corning is Most Worth Watching

Brian:

Starting with the most fundamental layer, glass, the first name is Corning. This is a 175-year-old materials company that actually draws the optical fiber—the "glass thread" mentioned at the start of the video. It holds roughly a 20% share of the global fiber market, making it a very core player.

Where Corning truly differentiates itself is technology. Its latest generation fiber can pack roughly twice the number of cores into the same physical space as standard cables, precisely the capability most urgently needed by already overcrowded AI data centers. Its bend-insensitive glass is also difficult for competitors to replicate. Add to that the world's largest fiber manufacturing facility and US-based supply compliant with "Buy America" rules, and together these factors form its true moat.

Because of this, Corning has simultaneously become a core supplier explicitly relied upon by Meta, Amazon, Google, Microsoft, OpenAI, and Nvidia. No other competitor worldwide has such a client list, and these relationships aren't just about "great cooperation"; they've translated into locked-in multi-year revenue.

Industry demand for fiber is currently growing about 22% to 25% annually, but new supply capacity across the industry is only about half that growth rate. Lead times have stretched to over 60 weeks. So hyperscale clients are booking capacity years in advance, even prepaying to lock it down. Meta committed up to $6 billion, Amazon signed multi-billion dollar contracts, and two other hyperscale clients signed agreements of similar magnitude—and this revenue was locked in years before the fiber was even drawn.

What strikes me most is the profit elasticity. Corning's optical communications revenue grew 36% last quarter, but segment profit grew 93%—double the revenue growth rate. This is what pricing power and economies of scale look like when they happen together. At the company-wide level, its operating margin has also risen from about 8% two years ago to over 16% now, with management targeting 20% by the end of this year.

Of course, the realistic side must be acknowledged. This story is no longer a secret. Corning's current PEG ratio is near 3, and its price-to-sales ratio is about 9 times. For a materials company, that's not cheap. So if you want the steadiest, least dramatic way to allocate to the fiber layer, Corning is suitable, but a more sensible rhythm is to wait for the next decent pullback.

Core Companies in the Interconnect Layer: Amphenol and Credo

Brian:

Next, we move to the interconnect layer—the one that actually links all components together. The first name is Amphenol. It's a fairly low-key giant that makes high-speed connectors and cable assemblies, covering both copper and optics. Now, you can find its products in almost every new AI server rack.

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

Its order backlog also hit a record $9.4 billion, with new orders still outpacing shipment velocity. As quarterly revenue jumped from around $4 billion to just over $7 billion, its operating margin wasn't dragged down; instead, it expanded from 22% to nearly 28%.

This is noteworthy. Normally, a $10 billion+ acquisition would put a company under integration pressure for a year or two, with margins typically declining first. But Amphenol's margins went up, demonstrating a strong ability to rapidly integrate acquired targets into its own high-standard operational system. Consequently, this large deal didn't become a burden but rather a profit enhancer.

Even rarer is that its valuation isn't unreasonable. Amphenol's PEG ratio is only about 0.7, with a price-to-sales ratio around 7 times. For a company growing this fast, this valuation is uncommon. So if you want a broader-coverage, relatively lower-volatility, and reasonably valued optical interconnect target, Amphenol is a name worth watching long-term.

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

It recently acquired a silicon photonics company, completing its end-to-end product stack up to 1.6T, and is already shipping to all of the top five US hyperscale cloud providers. Its growth has been quite phenomenal, with quarterly revenue surging from $135 million to $437 million in just six quarters—more than tripling.

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

But the risks here are very specific and must be seriously considered. Although it supplies all five major clients, just three of them account for 88% of the company's revenue. If even one hyperscale client slows down procurement, this stock could get hit hard by the market quickly. Add to that ongoing insider selling during the uptrend, and the company's current price-to-sales ratio of about 35 times—basically pricing in that "almost everything continues to go well." A PEG ratio near 1 indicates strong growth, but this type of company feels more like a high-conviction, wait-for-a-deep-pullback kind of target.

The Truly Key Player in the System Layer: Ciena

Brian:

Moving further up is the system layer—which lights up the fiber and moves data between buildings and countries. The most critical name here is Ciena. It is 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. You can think of it as a "capacity expansion cheat code without digging," because it enables existing fiber to carry more data without needing to lay new cables.

And this isn't just a lab demo. In just two quarters, this single product has already won 49 customers. Its position in key client relationships is also very strong. Its relevant solutions have been adopted by three of the top four hyperscale cloud and cloud service providers, with cloud clients now contributing nearly half of the company's revenue.

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

With revenue reaching record highs and growing 40% year-over-year, its operating margin has doubled from under 8% to over 15%. The problem is that the market is also aware of these good news, so the valuation has become very aggressive. Ciena's current forward P/E ratio is around 120 times, essentially pricing in "perfect execution." So