By Adam Clark

Lumentum and Coherent shares were falling early Tuesday. Expectations that Nvidia would give optical-networking stocks another boost might have been misplaced.

Lumentum was down 4.3% in premarket trading while Coherent was falling 4.4%.

Stock in both companies has surged in recent months on hopes for a boom in optical components, with the pair set to join the S&P 500 index. They got a boost earlier this month on news they would each receive a $2 billion investment from Nvidia, as the chip maker increases its use of co-packaged optics (CPO), integrating optical engines directly alongside its chips.

That set up expectations of a big announcement at Nvidia's GTC conference, taking place this week. However, investors look to have been disappointed by Nvidia CEO Jensen Huang's comments that his company will continue to use copper cables for much of the data transfer between its artificial-intelligence chips rather than fully transitioning to optical fiber.

"We will scale up with both copper and co-packaged optics," Huang said in his keynote address at Nvidia's GTC conference on Monday. "We need a lot more capacity for copper, we need a lot more capacity for optics."

Shares of Corning, the glass and fiber maker, were down 2.4% in Tuesday's premarket, while Applied Optoelectronics was down 4.9%. However, Credo Technology, which makes copper-based cable used to attach AI servers to networking switches, was up 1%.

Huang's comments perhaps shouldn't have come as a surprise. Broadcom CEO Hock Tan delivered a similar message earlier this month alongside his chip company's earnings report, suggesting the shift to fiber from copper may not happen this year or even next year.

No one doubts that optical networking is the future, but investors seem to be overeager to declare the death of copper.

"CPO vs. Copper/Pluggable optics is likely to continue, but at this point, we believe that CPO adoption expectations may be too high in the near to medium term," wrote J.P. Morgan analyst Gokul Hariharan in a research note this week.

Write to Adam Clark at adam.clark@barrons.com

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March 17, 2026 07:43 ET (11:43 GMT)

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