Now, a rising tide, as they say, lifts all boats. Though some boats, let’s be honest, are rather more leaky and patched-up than others. And today, in the peculiar world of optoelectronics, the most splendid vessels weren’t necessarily the ones you’d expect.
The giant Nvidia – a name that sounds suspiciously like a villain from a particularly frightening comic – announced some partnerships. Two big cheeses in the optics game, Coherent (COHR +15.46%) and Lumentum (LITE +11.75%), got a nice pat on the head, and their shares hopped up a respectable 14% and 11% respectively. Perfectly pleasant, if a little predictable.
Two Deals, One Scribble, Zero Loyalty
Nvidia, it seems, used a rather lazy template for these announcements – a bit like a schoolboy copying homework. Both deals were “non-exclusive,” which, in my book, means they haven’t quite made up their minds. It felt like they were spreading jam rather thinly over a lot of bread.
But here’s the truly scrumptious bit. Two companies Nvidia didn’t bother to include in this initial round of niceties – nLIGHT (LASR +21.00%) and Applied Optoelectronics (AAOI +21.64%) – suddenly went absolutely bonkers, leaping upwards like startled kangaroos. A whopping 20% and 21% jump, respectively! Now, that’s a proper spectacle.
Why the Underdogs Are Having a Giggle
The fact that these news-less stocks are soaring makes a sort of twisted sense. If Nvidia is on the hunt for multiple suppliers – and let’s face it, they’re a greedy beast – then nLIGHT and Applied Optoelectronics might just find themselves with a crumb or two falling their way.
And, of course, there’s the momentum. nLIGHT’s stock has been doing a dizzying dance, up 630% in a year! Applied Optoelectronics isn’t far behind, with a staggering 3,720% return over three years. They’re keeping pace with the shiny, popular Nvidia, which is a bit like a scruffy terrier nipping at the heels of a pampered poodle.
But let’s not get carried away. These are small companies, and small companies often have a wobbly history. Just a year ago, nLIGHT was looking rather pale, down 19% over two years. And Applied Optoelectronics had a dreadful tumble before its recent surge, plummeting 70% from 2021 to 2023. The big optics experts, Coherent and Lumentum, are far more stable – and, frankly, far more profitable.
The shareholders of these smaller companies are betting that their chosen underdog will either become a tempting morsel for acquisition, or a future partner for Nvidia. The small size of these companies amplifies every little wiggle.
Will this bet pay off? Hmm. I’m a bit of a skeptic, I confess. I wouldn’t be at all surprised if Nvidia shrugs off Applied Optoelectronics and nLIGHT, and decides to stick with the reliable, well-fed giants like Coherent and Lumentum. After all, Nvidia is a rather large beast, and large beasts prefer to dine with other large beasts.
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2026-03-03 00:22