A technician works at an Amazon Web Services AI data center in New Carlisle, Indiana, on October 2, 2025 (Noah Berger/Getty Images)

Optics stocks rise as executives signal more AI-related demand

Optics companies have rallied this year on expectations of higher demand for the components they make.

J. Edward Moreno

Optics companies Applied Optoelectronics, Lumentum, and Coherent rose Wednesday on signs that their products are in high demand as artificial intelligence infrastructure expands.

All three stocks were up in recent premarket trading. Applied and Lumentum were up 9.1% and 7%, respectively, while Coherent was up 2.8%. These firms offer solutions that use light rather than electricity to move information around in data center environments.

Speaking at the Optical Fiber Communications Conference in Los Angeles on Tuesday, Wupen Yuen, head of cloud and networking at Lumentum, said:

“Some customers are asking for a billion lasers a year. Starting with a B. It used to be in the millions, now it’s in the billions, so the amount of scale is just unimaginable... Because it used to be optics is a way for communicating. Now optics is part of compute. The AI does not scale, period, full stop, without optics.”

Coherent CEO Jim Anderson said silicon photonics is poised to replace copper in AI data centers because it is more efficient:

“The reason that we’re now starting to see photonics migrate into the scale-up network is the same reason that photonics took over scale-out and scale-across. And the reason is that you take any length of distance in the data center, whether it’s 3 meters or 3 kilometers, and if you crank up the data rate and if you crank up the total amount of bandwidth, eventually you hit a point where photonics is the most power-eﬃcient, fastest way to transmit that data across that length of distance. And so now what we’re starting to see is to continue to drive data center architecture, now adoption of photonics and scale-up.”

Applied Optoelectronics also said it’s going to increase its capacity by about 30% this year and double its anticipated capacity for 2027.

Optics companies have rallied this year on expectations of higher demand for their components. Earlier this month, Nvidia said that it would invest $2 billion apiece in Coherent and Lumentum to develop their advanced optics technologies.

Luke Kawa25m

Chinese tech giants rally after hiking AI prices

ADRs of Alibaba and Baidu are gaining in early trading after the Chinese tech giants announced AI price hikes.

Alibaba said that it’s hiking the price of its AI chips by up to 34% and raising the cost of cloud storage by 30%, with Baidu planning on increasing AI cloud product prices by up to 30%.

Tech companies in China and the US are aiming to show that AI is not just a technological breakthrough but also a core tool for moneymaking. And, well, raising the price of what you sell is one of the most basic ways to make more money!

“Baidu’s decision to raise AI cloud product prices by as much as 30%, according to Bloomberg News, is a positive development that signals a shift toward monetization rather than price competition,” wrote Bloomberg Intelligence analysts Robert Lea and Jasmine Lyu. “Baidu’s move mirrors similar steps by Tencent, Alibaba, and Zhipu, catalyzed by surging demand for agentic AI following the launch of OpenClaw.”

Luke Kawa2h

The Iran war is producing the sharpest spike in US gas prices since Hurricane Katrina

The average US national gas price jumped a little more than $0.05 to $3.84 on Wednesday, per the American Automobile Association, its highest level since September 2023.

While front-month West Texas Intermediate futures have come off the boil, down roughly 20% from their March 8 peak, front-month gasoline futures are trading about 2% shy of their 2026 peak as of 8:20 a.m. ET.

Prediction markets currently imply that gas prices will end the month near (but below) $4.30 per gallon.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

Prices are up nearly 29% over the past 20 days, per AAA, making this the sharpest such rise in fuel costs in more than two decades.

Hurricane Katrina, which made landfall in the US in late August 2005, was one of the deadliest and costliest natural disasters in American history. The damage wreaked havoc on energy infrastructure in the region, prompting gas prices to jump above $3 per gallon by early September from less than $2.30 in early August.

Matt Phillips3h

Oklo up as analysts spotlight “permits progress”

Oklo shares crept up early Wednesday after reporting a wider-than-expected full-year loss Tuesday after the close.

The company isn’t well covered on Wall Street, but a smattering of analysts spotlighted growing capex plans by the company — which not only has no profits, but no revenues — as a potential issue. On the other hand, they gave credit to the nuclear power startup for progress in securing key government permits and approvals.

Barclays (price target of $82, “overweight” rating): “Oklo advanced its momentum with DOE approval of a nuclear safety design agreement for Aurora at INL [Idaho National Laboratory], paving the way for 2028 operations. Management guided higher 2026-27 capex, strengthened fuel supply investments, and enters 2026 with an increase in liquidity.”

Citi (price target $73.50, “neutral/high risk” rating): “Despite strong execution, reaction may skew negative given higher than anticipated 4Q Opex, continued capital raise in Jan, and robust 2026 capex.”

Needham & Co. (price target $73, “buy” rating): “The company did not disclose Aurora unit costs, FY2026 CapEx ($350–450MM) came in above expectations, and [Aurora/Idaho National Laboratory] timing shifted modestly to 2028. We lower our PT to $73 (from $135) on reduced outer-year deployment (~3 GW by 2035) and a lower multiple, but maintain Buy. Execution, cost visibility, and fuel supply remain key gating factors.”

As of December 31, 2025, the company was well capitalized to continue burning cash, reporting cash and marketable securities worth some ~$1.4 billion.

Oklo reports larger-than-expected full-year loss per share

Barclays (price target of $82, “overweight” rating): “Oklo advanced its momentum with DOE approval of a nuclear safety design agreement for Aurora at INL [Idaho National Laboratory], paving the way for 2028 operations. Management guided higher 2026-27 capex, strengthened fuel supply investments, and enters 2026 with an increase in liquidity.”

Citi (price target $73.50, “neutral/high risk” rating): “Despite strong execution, reaction may skew negative given higher than anticipated 4Q Opex, continued capital raise in Jan, and robust 2026 capex.”

Needham & Co. (price target $73, “buy” rating): “The company did not disclose Aurora unit costs, FY2026 CapEx ($350–450MM) came in above expectations, and [Aurora/Idaho National Laboratory] timing shifted modestly to 2028. We lower our PT to $73 (from $135) on reduced outer-year deployment (~3 GW by 2035) and a lower multiple, but maintain Buy. Execution, cost visibility, and fuel supply remain key gating factors.”

As of December 31, 2025, the company was well capitalized to continue burning cash, reporting cash and marketable securities worth some ~$1.4 billion.

Tom Jones4h

Rocket Lab drops after announcing at-the-market offering to sell up to $1 billion of equity

What goes up must come down, and that’s exactly what’s happened with Rocket Lab shares over the last day or so.

Following a rally that saw the stock rise more than 10% on Tuesday, Rocket Lab shares came back down to earth in after-hours trading, after the company filed an offering that could see it sell as much as $1 billion in common stock over time. RKLB is down about 3% in premarket trading on Wednesday, as of 6:30 a.m. ET.

In the after-hours filing, the space company wrote that it would use proceeds from the offering to “fund future growth, including potential future acquisitions, and for general corporate and working capital purposes.” Rocket Lab’s Neutron rocket, which will be key in any path to profitability that the cash-burning business may forge, was delayed again last month, sending shares down at the time.

RKLB was involved in a wider space, satellite, and drone stock surge yesterday, as investors rallied around the sectors amid the ongoing war in Iran. The FAA had also announced new streamlined launch licensing requirements that will affect companies like Rocket Lab, Firefly Aerospace, and SpaceX. Per the FAA, the new rule, dubbed “Part 450,” will:

“...reduce the number of times an operator needs an FAA license approval and allow one license for a portfolio of operations, different vehicle configurations and mission profiles, and even multiple launch and reentry sites.”

That should cut down on the administrative burden on the industry more broadly.

J. Edward Moreno4h

AI drone company Swarmer soars on IPO debut

AI drone software company Swarmer soared 520% on Tuesday, its first day as a public company, and shares continued to climb in premarket trading on Wednesday.

Swarmer sold 3 million shares at $5 each, raising ~$15 million in total and giving it an initial market cap of about $60 million. By the time the closing bell rang on Tuesday, it was worth $382.8 million, according to FactSet.

Swarmer makes AI software that allows operators to coordinate large fleets of unmanned drones. Its technology has been used on the battlefield in Ukraine, and the company’s IPO comes amid the ongoing conflict in Iran.

The company made $310,000 in revenue in 2025, down 6% on the prior year, while its total losses also ballooned from $2.1 million in 2024 to approximately $8.5 million in 2025.