Optical stocks slide as investors question the AI spending outlook

what happened

Optical and networking companies were among Monday’s steepest decliners as artificial-intelligence stocks came under pressure. Ciena (CIEN), Lumentum Holdings (LITE) and Coherent (COHR) ended the session down 10%, 9.8% and 7.9%, respectively. Cisco Systems (CSCO) dropped 2.6%, Corning (GLW) declined 6% and Lumen Technologies (LUMN) lost 4.3%; Marvell Technology (MRVL) fell 3.4%. Over the past year, Lumentum and Coherent shares had gained 516% and 148%, respectively.

MarketWatch reported that the selling may have reflected caution about AI investment rather than a deterioration in optical demand. Giuseppe Sette, president and co-founder of AI investment analytics platform Reflexivity, said demand for optical products remained booked out for years. However, a joint demonstration by Lumentum, Astera Labs (ALAB) and Corning at the 2026 Open Compute Project Global Summit in San Jose, Calif., may already have been reflected in valuations.

Morningstar analyst Martin Szumski said comments from Broadcom (AVGO) CEO Hock Tan may also have influenced trading. Speaking on a panel in Singapore, Tan described capital as the biggest constraint on the AI buildout. Photonics companies depend heavily on committed capital spending by hyperscalers, or large cloud providers, so his remarks raised questions about continued all-out spending. Daniel O'Regan of Mizuho added that the group may have been giving back part of Friday’s gains after bullish comments from Lumentum’s CEO about component demand.

why it matters

The selloff highlights how exposed optical-infrastructure shares are to hyperscaler spending expectations: after strong gains over 18 months, cautious commentary can weigh heavily on the group.

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