AI Data Center Stocks Riding The Optics Buildout Investors Are Starting To Notice

AI data centers are hungry for speed, and the Marvell Technology move to buy Lumentum in an all stock deal valuing the target at an enterprise value of $115 billion has pushed high speed optics from the wiring closet into the limelight. Investors now face a rare moment where plumbing matters as much as processors. This article unpacks that story and walks through three stocks exposed to this news that may deserve a closer look.

The examples below are just a small sample. The full screen surfaced around 70 more AI data center infrastructure enablers with equally compelling optics and photonics narratives that are not covered here.

If you want to go straight to the source and identify, compare, and analyze potential high conviction opportunities across the full universe, head into the AI Data Center Infrastructure Enablers (Optics & Photonics Semiconductors) screener.

FormFactor (FORM)

FormFactor plugs into the AI data center story at a different layer, supplying the test and measurement gear that helps chipmakers qualify GPUs, high bandwidth memory and silicon photonics hardware before it ever reaches a server rack. With a market value of about US$6.8b, it has meaningful scale in this specialist corner of the ecosystem.

Accelerating adoption of generative AI, high performance computing, and HBM DRAM in data centers is continuing to raise test complexity and intensity, and FormFactor’s HBM probe card revenue guidance for the first half of 2026 sits more than 50% above the first half of 2025, which supports the idea that higher average selling prices and a larger test footprint could keep benefiting revenue and earnings.

What really matters now is how one pressure on its business model shapes the balance between rich pricing and the cost of keeping capacity ready for AI-heavy customers.

That tension around pricing and capacity is exactly where the FormFactor story gets interesting, and the full narrative for FormFactor shows how AI demand, capital intensity and risk are really interacting.

X-FAB Silicon Foundries (ENXTPA:XFAB)

X-FAB Silicon Foundries gives you a different angle on the AI data center theme, since its foundries produce analog, mixed signal and silicon photonics chips that can sit inside the high speed optical links data centers need as AI traffic grows.

X-FAB Silicon Foundries generated about $812 million of CMOS and MEMS Operations revenue and, with a market cap around €682 million, offers a pure play on outsourced analog, sensor and photonics manufacturing scale.

Strong ongoing growth in EV related automotive and industrial applications is driving higher semiconductor content per system for X-FAB Silicon Foundries, supported by design wins in power and sensor ICs, which can support a recovery in automotive revenue and improve earnings sensitivity to volume.

The real swing factor is how quickly underused capacity fills, since that single operational lever can have an outsized impact on future margins.

That margin swing is the real story, and the full narrative for X-FAB Silicon Foundries unpacks how X-FAB Silicon Foundries’ capacity, pricing power and AI exposure could be quietly accelerating.

Fabrinet (FN)

Fabrinet is one of the clearest pure plays in this screener. It packages the optical modules and photonics hardware that physically move AI data around hyperscale data centers, giving investors a direct line into the high speed interconnect build out behind headline GPU spending.

Fabrinet is a contract manufacturer focused on optical networking hardware for AI era data movement, with about $4.6b of optical networking equipment revenue and a market value near $11.7b. This reflects its role in the high speed interconnect supply chain for data centers and communications networks.

Marvell’s move on Lumentum spotlights how valuable the plumbing behind AI has become. Fabrinet sits where those optical modules turn chip-level compute into usable bandwidth across racks and campuses.

Surging AI related data center optics and DCI demand, with data center revenue at 51% of total and Q4 FY26 DCI products at more than a 1b annualized run rate, points to a multi year build out that could keep Fabrinet’s utilization and data center revenue elevated.

The big unknown is how one concentration risk plays out if hyperscalers start spreading high value optics orders across more suppliers or even bring pieces in house.

If that supplier concentration risk is on your mind, the full narrative for Fabrinet shows how Fabrinet’s AI optics momentum could still be gaining under the surface.

Seeking Fresh Alternatives Before They Fly

New themes can reach breakout momentum before most investors even glance at them. Scan these fresh stock ideas while they are still under the radar for now and consider them before they become widely noticed.

• Target resilient cash generators before the crowd spots their momentum by scanning the 36 high quality undervalued stocks curated from stronger balance sheets and healthier cash flows.
• Track accelerating dividend income streams while yields remain elevated by reviewing the 5 dividend fortresses built around dependable payouts and disciplined fundamentals.
• Hunt for early movers in automation and industrial efficiency by running through the 95 robotics and automation stocks carefully filtered for real business traction rather than hype.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com