5 Best Fiber Optics Stocks to Buy for the AI Data Center Boom

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1. Lumentum Holdings Inc. (NASDAQ:LITE)

Number of Hedge Fund Holders: 123

Lumentum Holdings Inc. (NASDAQ:LITE) is one of the Best Fiber Optics Stocks to Buy for the AI Data Center Boom. On June 9, 2026, Needham & Company reiterated its Buy rating on Lumentum and maintained a $1,040 price target, extending a bullish view closely tied to AI optical networking. Needham analyst Ryan Koontz has described Lumentum as a 2026 “pick of the year,” with the firm’s thesis resting on AI-driven demand as data centers shift more traffic from copper links to optical connections.

The call is not without valuation risk, since the stock has already had a large run, and expectations around AI optics are high. Still, Needham’s maintained target suggests confidence that Lumentum can keep benefiting as hyperscalers build denser AI clusters that need faster links between accelerators, switches, and racks. The company’s role in optical components and photonics gives it direct exposure to that bandwidth problem rather than just a loose AI label.

Lumentum Holdings Inc. (NASDAQ:LITE) supplies optical and photonic products used in cloud networking, AI infrastructure, advanced communications, industrial lasers, and 3D sensing. Its portfolio includes optical components, modules, transceivers, lasers, and subsystems.

While we acknowledge the potential of LITE to grow, our conviction lies in the belief that some other AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LITE and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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