Compiled & Edited by: Deep Tide TechFlow
Host: Brian, formerly worked at Target & Amazon
Podcast Source: BWB - Business With Brian
Original Title: Millionaires are Hitting These 10X Stocks HARD!
Broadcast Date: June 21, 2026
Key Takeaways
The real bottleneck in AI data centers is not a single chip winner, but the entire photonics industry chain that converts electrical signals to optical signals and transports massive amounts of data out. Brian's core judgment is: As the industry upgrades from 800G to 1.6T, and even moves towards 3.2T, the companies that reap excess returns first are often not the hottest star companies in the spotlight, but suppliers like Corning, Amphenol, and Ciena that all giants cannot bypass, as well as more upstream materials and testing segments. This podcast comprehensively outlines the complete photonics supply chain and the golden high-growth stocks you need to keep a close eye on before the Wall Street herd rushes in and becomes latecomers.
Highlighted Viewpoints
Why AI Data Centers Must Shift to Optical Communication
- "Copper cables are hitting a physical limit, every data center will eventually have to shift to optics. China has already proven to the entire industry that this road can go much further."
- "Once the data transmission distance exceeds about 3 feet, copper cables quickly lose their advantage, generating more heat and consuming more power; optics solves all these problems at once."
- "The transition from electricity to light is the core significance of photonics technology."
Why Investment Opportunities Are Often in the Supply Chain, Not Star Companies
- "As long as a new technology is proven viable, the greatest wealth often flows first to companies that all participants must rely on, not the single name grabbing the most headlines."
- "Glass, lasers, connectors, materials, and testing equipment—none can be missing. This is the most valuable part of the photonics industry chain."
What to Watch for in Corning
- "Corning's optical communications revenue grew 36% last quarter, but corresponding profits grew 93%, indicating that pricing power and economies of scale are simultaneously materializing."
- "Corning has simultaneously become a core supplier specified by Meta, Amazon, Google, Microsoft, OpenAI, and Nvidia. No other competitor in the world has such a client list simultaneously, and these relationships have already translated into long-term, locked-in revenue."
- "Meta has committed up to $6 billion, Amazon has also signed multi-billion dollar contracts, and two other hyperscale customers have signed agreements of similar magnitude, with much of this revenue locked in years before the fiber is actually pulled."
What Amphenol and Credo Represent
- "If you want a broader-coverage, relatively less volatile optical interconnect target with reasonable valuation, Amphenol is a name well worth watching long-term."
- "Credo acts more like a bridge between the old and new worlds, squeezing the last bit of life out of copper cables within racks while also extending into optical communications."
- "Credo's risks are also very clear: extremely high customer concentration. If just one mega-customer pauses procurement, the stock could be hit hard."
Opportunities in the System Layer, Upstream Materials Layer, and Testing Layer
- "Ciena's value lies in enabling existing fiber to carry more data without needing to re-dig and lay new lines."
- "AXT occupies an even more upstream position, essentially a scarce supplier of key wafer materials for optical lasers, but it also faces significant risks from Chinese export licenses."
- "VEO Solutions is more like the 'shovel seller' in the optical communications world. Because whether it's fiber links, transceivers, or system equipment, everything needs testing before deployment and monitoring afterward. VEO sells the testing tools all this equipment must go through."
Thematic Allocation and ETF Choices
- "If you don't want to pick companies individually, there are now pure photonics-themed ETFs that allow you to cover this theme with one click."
- "But these funds are very new, still small in size and with relatively high fees. They are more suitable for a watchlist than for blindly chasing highs."
China Has Pushed the Fiber Transmission Ceiling Much Higher
Brian:
Engineers in China recently lit up a single strand of glass optical fiber that can carry 5 times more data than the current level elsewhere in the world. This isn't a newly laid line or massive excavation, but activating a fiber thinner than a hair within already-buried cables. What used to take maybe half an hour to transfer the entire Library of Congress now takes about 5 minutes.
This technology isn't truly deployed in the U.S. yet, showing just how fast this field is evolving. AI is creating a data deluge far exceeding current transport capabilities, and U.S. 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 themselves—they will buy it.
What they buy is glass, lasers, and chips that convert electricity to light, and the number of suppliers that can truly provide these is actually very limited. Having watched the industry from the procurement side of the supply chain for many years, my experience tells me the pattern for these opportunities has hardly changed. As long as a new technology is proven viable, the greatest wealth often flows first to companies that all participants must rely on, not the single name grabbing the most headlines.
Why Photonics Technology Is Becoming a Core Variable Now
Brian: Today I want to break down the entire photonics industry chain for you and clarify the publicly listed companies at each layer. Why photonics technology, and why now specifically?
The answer boils down to a hard constraint. Inside data centers, all chips need to communicate with each other. Over short distances, copper is still the winner; but once you want to move data beyond about 3 feet, copper's problems quickly surface. The longer the distance, the more severe the heat generation and power consumption.
Light solves almost all these problems at once. It travels further, generates less heat, and consumes only a fraction of the power compared to copper solutions. The transition from electricity to light is the core significance of photonics technology.
More importantly, this inflection point is now very clear. Every data center is upgrading from 800G to 1.6T connections, with 3.2T already on the table. Meanwhile, the Chinese fiber mentioned earlier has pushed the industry's overall ceiling higher once more.
Breaking it down, the key layers include: the glass, fiber, and cables that actually carry the light signal; the connectors that link everything together; the system equipment responsible for 'lighting' the fiber and transmitting data between buildings and countries; and the underlying materials and testing equipment. I've covered chips, lasers, and silicon photonics themselves in previous videos, so today's focus is on these often-overlooked but also profitable segments.
Within these groups, I'll give names worth putting on your watchlist. However, I must be clear upfront: many targets have already risen significantly, and truly favorable entry points will likely require waiting for pullbacks.
Why Corning Is the One to Watch in the Glass and Fiber Layer
Brian:
Starting with the most basic glass, the first name is Corning. This is a 175-year-old materials company that actually pulls the optical fiber—that 'glass thread' mentioned at the video's start. Its global fiber market share is about 20%, making it a very core player.
Where Corning really pulls ahead is in technology. Its latest generation fiber can pack roughly twice the number of fiber cores into the same physical space as standard cables, which is precisely the capability desperately needed in already severely congested AI data centers. Its bend-resistant glass is also difficult for peers to replicate. Combined with the world's largest fiber factory and U.S.-based supply compliant with 'Buy America' rules, these factors together form its real moat.
It's precisely because of this that Corning has simultaneously become a core supplier specified by Meta, Amazon, Google, Microsoft, OpenAI, and Nvidia. No other competitor in the world has such a client list simultaneously, and these relationships aren't just at the 'good partnership' stage—they've already translated into long-term, locked-in revenue.
Current industry demand for fiber is growing about 22% to 25% annually, but the industry's new supply capacity is only about half that growth rate, with lead times stretching beyond 60 weeks. Consequently, hyperscale customers are booking capacity years in advance, even paying upfront to lock it in. Meta has committed up to $6 billion, Amazon has also signed multi-billion dollar contracts, and two other hyperscale customers have signed agreements of similar magnitude, with much of this revenue locked in years before the fiber is actually pulled.
What grabs my attention most is the profit elasticity. Corning's optical communications revenue grew 36% last quarter, but this segment's profits grew 93%, more than double the revenue growth rate. That's what pricing power and economies of scale look like when they hit simultaneously. At the company-wide level, its operating margin has also increased from around 8% two years ago to over 16% now, with management targeting 20% by year-end.
Of course, the reality must also be acknowledged: this story is no secret. Corning's current PEG is near 3, and its P/S ratio is around 9x, which isn't cheap for a materials company. So if you want the steadiest, least dramatic way to play the fiber layer, Corning is suitable, but a more reasonable approach is to wait for the next more substantial pullback.
Core Companies in the Interconnect Layer: Amphenol and Credo
Brian:
Moving to the connection layer—the layer that actually connects all components—the first name is Amphenol. It's a rather low-key giant making high-speed connectors and cables, including both copper and optical. Now, almost every new AI server rack has its presence.
The key to understanding Amphenol is that it is essentially an extremely efficient M&A machine. In January this year, it spent $10.5 billion to buy CommScope's entire fiber connectivity business, overnight transforming from a connector company into a genuinely significant fiber player. Now, AI data center business has become its core engine, the largest single segment, with organic growth exceeding 80% last quarter.
Its order book also reached a record $9.4 billion, with new orders still coming in faster than shipments. As quarterly revenue jumped from about $4 billion to slightly over $7 billion, its operating margin wasn't dragged down but actually expanded from 22% to nearly 28%.
This point is worth noting. Normally, a $10+ billion acquisition would pressure margins for a year or two due to integration. But Amphenol's margins went up instead, indicating its strong ability to quickly bring acquired assets under its own high-standard operating system. That's why such a large deal didn't become a burden but rather a profit booster.
What's even rarer is its valuation isn't outrageous. Amphenol's PEG is about 0.7, with a P/S ratio around 7x. For a company growing this fast, this valuation isn't common. So if you want a broader-coverage, relatively less volatile optical interconnect target with reasonable valuation, Amphenol is a name well worth watching long-term.
The second name in the connection layer is Credo Technology. It acts more like a bridge between the old and new worlds. On one hand, it uses low-power chip technology to squeeze the last bit of transmission capability from copper cables inside racks; on the other hand, it's also working on optical communication chips and cables 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 five top U.S. hyperscale cloud providers. Its growth is quite staggering: quarterly revenue more than tripled from $135 million to $437 million in just six quarters.
Another telling metric is its roughly 68% gross margin. This figure is more akin to software companies than hardware firms. Meanwhile, its operating margin nearly doubled to 37% as scale increased. Management's revenue guidance for the next fiscal year remains over 80% growth.
But the risks here are very specific and must be considered seriously. Although it supplies all five major customers, just three of them account for 88% of its revenue. If any one hyperscale customer slows procurement, this stock could be severely punished by the market quickly. Add to that insider selling during the uptrend, and the company's current P/S ratio is around 35x, essentially pricing in 'almost everything continuing smoothly.' With a PEG near 1, the growth is indeed strong, but such companies are more suited for high-conviction investors waiting for deep pullbacks before considering entry.
The True Key Player in the System Layer: Ciena
Brian:
Moving further up is the system layer that 'lights up' the fiber and transports data between buildings and countries. The most critical name here is Ciena. It's a leader in coherent optics in the West. The company's proprietary WaveLogic technology is the world's first solution to pack 1.6T of data into a single wavelength of light. You can think of this as a 'cheat code for capacity expansion without digging,' because it allows existing fiber to carry more data without relaying cables.
And this isn't a lab demo. In just two quarters, this single product has already won 49 customers. Meanwhile, its position in key customer relationships is very strong. Its relevant solutions have been adopted by three of the top four hyperscale cloud and cloud service providers. Cloud customers now contribute nearly half of the company's revenue.
For me, the most crucial 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 revenue equivalent to over a year's worth.
As revenue hit a historical high, growing 40% year-over-year, its operating margin also more than doubled from less than 8% to over 15%. The problem is, the market also knows this good news, so valuation is very aggressive. Ciena's forward P/E is around 120x, essentially pricing in 'perfect execution.' Therefore, the fundamentals are strong, but price requires respect.
The True Upstream Bottlenecks: AXT and Test Equipment Company VEO Solutions
Brian:
Now entering my favorite layer: the 'suppliers behind the suppliers.' The most upstream name in this entire video is AXT. The number of companies worldwide that can truly produce indium phosphide wafers is very limited. And this special crystal is the critical substrate upon which all optical lasers must be built. From this perspective, it's almost a natural moat because this crystal growth capability isn't something you can develop overnight.
Now, with all laser manufacturers scrambling for supply, AXT's backlog for such materials has exceeded $100 million, a record. But its risks are also among the highest on this list and very specific. Almost all its manufacturing is in China, and China now requires government permits for each export order. This directly impacted its revenue last quarter; even with a record backlog, it doesn't guarantee smooth shipment.
Additionally, the company raised about $55 million, causing shareholder dilution, and insiders have been net sellers of over $70 million worth of stock during the uptrend. Even more troublesome, it's still not profitable, although losses are narrowing and gross margins have improved from 17% to around 30%.
So, AXT's story is real, and the bottleneck is real. But if you look at its P/S ratio of nearly 66x, you'll understand this is more like a high-volatility, high-risk small-position 'lottery ticket,' not a core holding suitable for heavy allocation.
The final name in this layer is VEO Solutions. It's more like the 'shovel seller' in the optical communications world. Because whether it's fiber links, transceivers, or system equipment, everything needs testing before deployment and monitoring afterward. VEO sells the testing tools all this equipment must go through.
The beauty of this position is its independence from specific winners. You don't need to bet on which laser company wins or which transceiver becomes mainstream, because whoever wins will ultimately need its equipment for testing. This is a business position I personally like very much.
For years, VEO's revenue was essentially flat, stuck around $285 million per quarter. Only when AI infrastructure build-out truly accelerated did its network testing business begin to explode, rising over 54%, as data centers urgently needed to validate vast amounts of new optical communication equipment. Its quarterly revenue now exceeds $400 million, and operating margins have returned to double digits.
Beyond that, the company has a quieter but high-margin second business: producing anti-counterfeiting coatings printed on global banknotes, providing additional high-margin support. Note that insiders, including the CEO, have also been selling. Its current PEG is about 1.4, not too extreme, but like other names on the list, the prior run-up is substantial. A more reasonable approach is still to wait for it to cool off first.
If You Don't Want to Pick Stocks Individually, There's a New Pure-Play Photonics ETF
Brian: Many might ask, why didn't I focus on Coherent, Lumentum, Marvell, Broadcom, and the actual chip-making foundries today?
These companies certainly belong on a watchlist; they occupy the central laser and silicon photonics segments of this chain and are a very important part of the theme. I've just done separate deep dives on them previously, so today I wanted to focus on the parts others often skip: glass, connectors, system equipment, and the suppliers behind them.
If you don't want to pick companies one by one, there's also a one-click way to allocate to the entire theme. A pure-play photonics ETF has recently appeared on the market, ticker FOTO, the Tuttle Capital Pure Play Photonics Fund.
What I like about it is its genuine 'pure theme' screening. It excludes large conglomerates where photonics is only a small part, concentrating holdings on true optical companies. Its largest holdings are precisely the laser and transceiver companies I mentioned earlier, like Lumentum, Coherent, Fabrinet, and also include IPG Photonics and Inphi. The fund holds only 15 names, with the top 10 comprising nearly 90%, making it very concentrated and clearly betting on 'pure photonics.'
Of course, complete disclosure is necessary. This fund is only a few weeks old, has no real long-term performance record, has about $140 million in assets, and charges a 0.75% expense ratio. So you should definitely do your own homework. But if you just want to put the 'copper-to-light' theme on your radar initially, FOTO is worth watching.
Conclusion: Copper Has Hit Its Limit, Beneficiaries Will Spread Along the Entire Optical Chain
Brian: Wrapping up. Copper has begun hitting physical limits, and every data center on Earth must migrate to light. China has already proven to the entire industry that this road can go much further.
Capital is already flowing into this chain. The real question is no longer whether this will happen, but which batch of companies will capture the most incremental gains during this accelerated transition.
Combining the laser and silicon photonics companies I discussed earlier with glass, connectors, systems, and upstream suppliers from today's video, you essentially have a fairly complete map of the photonics industry chain from end to end.
