Shares in the optical communication sector continued their upward trajectory. At the time of writing, FIT HON TENG (06088) rose 9.03% to HK$9.9; TIME INTERCON (01729) gained 6.61% to HK$24.2; HUA HONG SEMI (01347) advanced 5.66% to HK$138.2; and YOFC (06869) increased 4.96% to HK$258.2.

The catalyst stems from recent comments by NVIDIA's CEO, Jensen Huang, who stated in an interview that the next generation of AI infrastructure will require extensive optical connectivity, as surging computational demands have outpaced the capabilities of traditional copper wiring. Furthermore, NVIDIA and global fiber optic leader Corning jointly announced a multi-year commercial and technology partnership. This development signals a shift in "optical investment" from optical modules towards backend transmission equipment like "optical fiber."

Analysis from Everbright Securities indicates that fiber manufacturers are transitioning from traditional communication material suppliers to core suppliers for AI data centers, positioning the sector for a potential "double boost" in both valuation and earnings. Corning's product structure aligns with the AI data center construction cycle, prompting a market re-evaluation of its value.

The new fiber cycle driven by AI inflation also benefits domestic manufacturers. Factors contributing to this opportunity include the spillover of North American orders to Chinese firms, the high barriers to entry in optical preform production held by domestic players, and their ongoing expansion of overseas capacity. These elements are driving sustained improvements in the financial performance of domestic manufacturers. Concurrently, the AI construction cycle is elevating the industry's overall valuation benchmark, presenting a "double boost" opportunity for the fiber optic sector.