Mental model

GPU / Switch → Electrical → Optical → Fiber → Optical → Electrical

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1️⃣ Lasers & Core Photonics (Light generation)

These companies create the optical physics that everything else depends on.

• Lumentum (LITE)
  • Lasers, modulators, photonic components
  • Strong AI datacenter leverage, high margins
• Coherent (COHR)
  • Broader photonics + materials exposure
  • More diversified, slightly less pure-play AI optics

Investor note:
Upstream, IP-heavy, best risk-adjusted optics exposure.

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2️⃣ Optical Transceiver Modules (What hyperscalers buy)

Finished 400G / 800G pluggable modules.

• Applied Optoelectronics (AAOI)
  • Datacom-focused
  • Extremely high beta, customer concentration
• Cisco (CSCO)
  • Owns Acacia (coherent optics)
  • Optics is strategic, not core revenue

Investor note:
Module vendors = most cyclical, most explosive upside.

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3️⃣ Optical DSPs & Signal Integrity (Bits don’t smear)

Critical at 400G → 800G → 1.6T.

• Credo Technology (CRDO)
  • Retimers, equalizers
  • One of the purest AI networking plays
• Marvell Technology (MRVL)
  • Coherent DSPs (400ZR / 800ZR)
  • More telecom + custom silicon exposure
• Broadcom (AVGO)
  • DSPs + Ethernet switches
  • Vertically integrated, dominant but less pure

Investor note:
This layer has pricing power as speeds rise.

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4️⃣ Electrical Fabric & Scale-Out Connectivity

Before optics even show up, signals must scale.

• Astera Labs (ALAB)
  • PCIe / CXL / memory fabric
  • Enables GPU scale-out, complements optics
• Broadcom (AVGO)
  • Ethernet switching (Tomahawk, Jericho)

Investor note:
ALAB = architectural winner if scale-out AI keeps growing.

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5️⃣ Physical Interconnect: Cables, Connectors, Fiber

The “boring” layer — but absolutely essential.

• Amphenol (APH)
  • Copper & fiber connectors
  • Quiet AI rack density winner
• TE Connectivity (TEL)
  • Direct APH competitor
  • Slightly less AI-pure
• Corning (GLW)
  • Optical fiber & cable
  • AI clusters = more fiber per rack

Investor note:
Lower beta, excellent compounders.

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6️⃣ Silicon Photonics & Future Optical Architectures (Long-dated)

Potential disruption or evolution of today’s stack.

• Intel (INTC)
  • Silicon photonics + co-packaged optics
• Broadcom (AVGO)
  • CPO roadmap tied to switches

Investor note:
Real — but slow adoption and hyperscaler-specific.

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Summary table

Stack Layer	Public Companies
Lasers & photonics	LITE, COHR
Optical modules	AAOI, CSCO
Optical DSP / SI	CRDO, MRVL, AVGO
Electrical fabric	ALAB, AVGO
Connectors & fiber	APH, TEL, GLW
Future silicon photonics	INTC, AVGO