Applied Optoelectronics (AAOI) jumped roughly 6-7% while Lumentum (LITE) gained about 5%, both riding a wave of investor enthusiasm tied to AI data center buildouts. The catalyst: AAOI’s massive manufacturing expansion in Sugar Land, Texas, where a $300 million facility is taking shape to produce the high-speed optical transceivers that make AI infrastructure actually work.
The numbers behind the rally
AAOI’s Q1 2026 revenue hit $151.14 million, a 51% increase year-over-year. The datacenter segment was the star, with revenues more than doubling to $81.4 million.
Lumentum posted record Q3 FY2026 revenue of $808.4 million, up 90% from the prior year.
The Sugar Land facility, which AAOI broke ground on back in February 2026, spans 210,000 square feet. It’s purpose-built for 800G and 1.6T transceiver production. AAOI’s target is ambitious: up to 700,000 units per month of these high-speed transceivers by the end of 2027, paired with a roughly 350% expansion in laser fabrication capacity.
