The order books say one thing

Coherent, which makes lasers, optics and transceivers and now draws 79% of revenue from data-center and communications customers, told investors in August that its fiscal 2027 is effectively booked out, with customer orders extending into calendar 2028. June-quarter revenue was $2.05bn, up 33.7% from a year earlier, and gross margin widened to 38.5%. The shares are down 8.2% over three months.

That pattern repeats across the group. MACOM, which designs radio-frequency and high-speed analog chips split between defense radar and data-center optics, posted a record book-to-bill of 1.6 to 1 on 6 August and data-center revenue of $138m, up 40% in a single quarter. Its stock is down 12.8% since May. Lumentum, the laser and transceiver maker, grew June-quarter revenue 109% to $1.01bn and lifted gross margin fourteen points to 47.4%; it is flat over three months. Management says all of its capacity for electro-absorption modulated lasers is locked under long-term agreements through calendar 2027, with laser chip volumes doubled year over year — supply, not demand, is the binding constraint.

The month was two sessions

The 29% average gain of the past month is not a broad advance. On 30 July every one of the seven rose between 8.7% and 20.0%, after Alphabet raised 2026 capital spending to as much as $190bn and Meta lifted its own range to $125–145bn. On 4 August all seven rose again, by 7.1% to 24.6%, on reports that the administration is drafting a ban on imports of new Chinese optical transceiver models for US data centers. That is a market-share story rather than a demand story: China's Innolight and Eoptolink together control more than 60% of the high-bandwidth 800G-and-above module segment, and Western replacements are estimated to need one to two years to scale.

Remove each company's two best sessions and the group's month goes from +29% to roughly -2%, with four of the seven negative and Astera Labs at -22%. Every one of the seven also remains below its three-month high, from Credo at -6.5% to POET at -39.3%. The month was a rebound off July's selloff in optics stocks.

What got re-rated, and what didn't

Credo sells retimer chips and active electrical cables — copper links that undercut optics inside a rack on power — and it is the group's clear winner, up 64% in three months. The business justifies enthusiasm: fiscal fourth-quarter revenue rose 157% to $437m at a 68.2% gross margin, and consensus has revenue up another 83% this fiscal year. But the price rose faster than the earnings. Its trailing price-to-gross-profit has expanded to 58x from 46x in May, and forward earnings multiple sits at 46x. Credo has not reported since March; the whole month has been sympathy trading, including an 8% jump on 17 August after a broker note on NVIDIA's next-generation rack ramp.

Astera Labs, which sells connectivity chips and cable modules that link accelerators within a rack, guided the September quarter to $540–560m, 40% sequential growth, and said its Scorpio X switch family reached volume production a quarter early. The stock fell 12% the next day. At 81x forward earnings it carries the most expensive multiple here.

Against that, MACOM's trailing price-to-gross-profit has contracted to 38x from 40x in May — gross profit grew faster than the share price — and Coherent's 19x forward gross profit is roughly half Credo's 32x and less than half Astera's 39x. The two companies with the most visible order books wear the lowest multiples.

Two that are not the same business

Applied Optoelectronics is the trap in the group. Revenue grew 86% to $192m last quarter, but gross margin compressed to 27.7% from 30.3%, the company lost $23m, and the diluted share count rose 44% in a year. Its largest customer is a cable-television account at 42% of revenue, not a hyperscaler, and its top ten customers are 99% of sales.

POET Technologies, which licenses an optical-interposer packaging platform, booked $570k of revenue last quarter at a negative gross profit against a $1.24bn market value. No earnings or gross-profit multiple can be computed for it, and its 2027 revenue consensus rests on one analyst.

The underlying market is real — LightCounting puts AI cluster optics at $26bn in 2026, about 60% growth. The question is which of these companies is being paid for it.

The setup

Where it stands — Order books accelerated across the group, yet only Credo and Astera Labs are higher over three months. Would confirm — Coherent's next quarter landing at or above its $2.2–2.4bn guide with datacom growth held above 50%. Would invalidate — MACOM's book-to-bill slipping back below 1.3, or Lumentum reporting laser capacity no longer sold out. Watch next — Credo's fiscal first-quarter report, its first earnings event since 2 March. Valuation — Coherent 42x forward earnings and 19x forward gross profit, against Credo's 46x and 32x, Astera's 81x and 39x.