TradingKey - The U.S. plans to ban imports of Chinese optical modules, stimulating a collective rally in local suppliers' stock prices.

On August 4, Eastern Time, optical communication concept stocks surged collectively, with Applied Optoelectronics ( AAOI) skyrocketing over 20%, Coherent ( COHR) surging about 18%, Lumentum ( LITE) surging nearly 14%, Corning ( GLW) rising nearly 8%. On the news front, the Trump administration is drafting new regulations, planning to ban U.S. data centers from importing next-generation Chinese-made optical transceiver modules.

Applied Optoelectronics stock price chart, Source: TradingView

According to an exclusive report by Reuters, the U.S. Federal Communications Commission (FCC) is leading the formulation of an import ban, planning to prohibit new models of Chinese data center components from entering the U.S. market to protect U.S. AI infrastructure from cybersecurity and data leakage threats. The plan is expected to be announced this year.

Currently, the market expects the four major U.S. cloud service providers, namely Amazon ( AMZN ), Microsoft ( MSFT ), Google ( GOOG ), Meta ( META) , will be forced to shift their orders to non-Chinese suppliers, thereby driving a surge in U.S. optical communication concept stocks. However, a complete cutoff in the short term could lead to rising construction costs for North American AI data centers, which may escalate the capital expenditures of the four major cloud providers.

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