I am bullish on Space, defense, data centers, and physical AI. I written about it here so Photonics is another sector that is looking very interesting and something that I will be building a huge position in the coming few months and for the 2026.
One missing piece of the puzzle is of Physical AI is photonics or a AI enabled photonics. Maybe we are talking about an extended future but we are seeing some form of the features in the forward looking companies. AI is a huge enabler of this.
How I was introduced to Photonics? Reading a substack Called Crux Capital Group which is run by a gut name: Gaetano (his X Account) . He has some nice list of all the players in this industry and a lot of them are doing some amazing things. Some of these stocks are up by a lot in 2026 but you can still get good opportunities. Another of my favorite write in this space and in general a more thought leader is: Serenity (X account)
I was reading post of serenity and she mentioned about something that I think needs to be quoted here:
This is one of the only times in history to find a company that can go from $1.00 to $22.00 in 1 year during the new gold rush.
This is because the TAM of a $50m commodity can go up 1000% to $1B+ as the bottleneck of:
Here’s why and how:
A commodity previously only used for one extremely niche field (like Telecom), are now starting to see a 1000% TAM expansion because it sits at the intersection or bottleneck of AI, Defense, and Space.
Division in the Photonics sector:
I took this guide from the same guy I mentioned above (Gaetano from one of his X article)
The division in layers as follows:
- Layer 1: Foundational Input. This layer represent the origination, where everything begins. The materials, the substrate, optical media, and the precision inputs that makes the photonics system.
- Layer 2: Core Photonics components: The foundational input is converted into devices. Examples like Lasers, detectors, modulators, optics, and the related components.
- Layer 3: Subsystems: Subsystems where the components are turned into something recognizable. Sensor payloads, Optical communication terminals, directed energy modules. These subsystems integrate components into useful products.
Later at the end of the article, we will come to this section again and list the relevant stocks based on the relavent category.
What is Photonics?
Photonics as the name “Photon” (Physics) is called Light. Transferring, detecting, and the transmission of data or energy through Light.
In the data centers, Photonics used as an alternative of Copper to transmit unlimited data. In the defense laser space, it is the use of proper physics techniques to direct energy at a certain spot using mirrors.
Each of the Photonics Stock explained:
COHR: Coherent Corp.
I have a postion in this company. I am very bullish on this company. I wish I discovered it a few years ago when it was trading in double digit and low mid 40s price.
COHR is a pure play Photonics play. Should I call it the NVDA of the Photonics space?
COHR makes the building blocks of light. They produce different photonics products used in data centers/AI and in industrial manufacturing. It’s vertically integrated across (1) optical networking products like transceivers, modules, optics, and semiconductor devices, (2) engineered materials & compound-semiconductor devices, and (3) industrial laser sources/systems and optics (e.g., excimer/solid-state/CO₂) used in semiconductor & display equipment, precision manufacturing, and scientific/instrumentation markets.
Coherent is a supplier of most of the photonics industry. It is more like pick & shovel play in the Photonics sector.
OPTX: Syntic Optics Holdings
Synthic Optics Holdings is a company with products in Defense, Medicine, electrical, and photonics components. They have a deal with Andruil Technologies for one of the product they produce for the US army.
They build custom photonic manufacturer that builds everything from Polymer optical components to Opto-mechanical parts and complete optical/electro-optical assemblies and subsystems. They are vertically integrated which means they do everything from dying to assembly.
I am going to build a good size position in this company with time. I already bought 2500 shares at $4.1 per share. I hope, back in next few years, when I look to this, it gives me good returns. I will try to reach at least 10,000 shares.
$AXTI
AXT is exposed to geo-political truth. It has a significant China exposure and any bad political situation makes it vulnerable.
AXT, Inc. AXT is a material science company that develops and manufactures high-performance compound and single element semiconductor wafer substrates comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge). These components are very important for the Photonics space and Data centers.
This company show some impressive growth from last 6 months growing over 700% at the time of writing this post.
LITE:
Lumentum (LITE) provides an access to high performance optical components in a supply constrained part of the stack.
LPTH LightPath Holdings:
LightPath produces different components like Lasers for defense, optical components. They have the following types of product that offer services like:
- Thermal Imaging solutions
- Optical components
- Assemblies
They are in the industry of Aerospace defense, industrial, and Oil and Gas sector.
One of the things that I am repeatedly seeing is that companies mentioned these big companies as their customers say Andruail or Lockheed, and I think, you should just ignore these details. These hundreds of billions of dollars market cap companies always have hundreds and thousands of vendors where they buy their products from. There should be other important thing that you should care about while investing in a company. Also, this is not related to this company, it is one of my favorite company and I might buy shares of this company.
ALMU Aeluma, Inc.
Aeluma, Inc. with a market cap of almost 300 Million dollars, is a company that manufacture Silicon for photonics. They are in the manufacturing side of the photonics. They produce high performing semi-conductors.
POET Poet Technologies:
Poet Technologies, the most liked stock among the retail, especially on X. We will see why people are so bullish on this sector. There are a lot of reasons the company is getting a good press (and there is a lot of volatility and volatility come with the investing in microcaps companies.
But, Poet Tech is not my favorite stock. The company is promising this from ages and the execution risk is not something I appreciate. Yes, there is a high demand today in the data center space as they are trying to replace copper with photons. Not something I am bullish on them. I would rather sell this stock. Think of a company, that is in the business for 2008 and they still need funds. Look like a more alchemy dream to me. The stock, while writing this is trading under $7-$8 range.
PLAB Photronics Inc:
A 2 Billion dollars market cap company. Photronics is a leader in the Photomask technology. They manufacture IC (Integrated circuits) and high end displays. Financially, the company is looking good but the growth in revenue is a bit stretched.
There are more that I will be discussing and I will also update with each of the layer of the industry these stocks fall into.
Again, I would have never been bullish on this sector if it was not the great knowledge from Gaetano (Follow his X handle here) and subscribe to his Substack: Crux Capital.
I will be updating this article later after a few days or to the most in weeks.
Thank you for reading.