Key Highlights

● Lumentum climbed to $972.47 at the close on Tuesday, leading a rebound in optical networking stocks after Monday's selloff.

● Citi forecast that the optical switching market could reach $11 billion by 2030, a call that helped the group recover.

● Corning signed a multiyear fiber and cable Supply agreement with AT&T worth more than $3 billion, adding a separate catalyst.

● Chip stocks joined the bounce, though the broader market slipped and long-term Treasury yields reached multi-decade highs.

Optical networking stocks staged a sharp rebound on Tuesday, September 29, 2026, turning one of the market's most volatile corners into one of its brightest. Lumentum Holdings (NASDAQ:LITE) led the charge, climbing to $972.47 at the close. The bounce came a day after Citi forecast that the optical switching market could reach $11 billion by 2030, a call that initially failed to stop a slide in the group but helped it recover a session later.

Coherent (NYSE:COHR) also jumped after falling on Monday, Applied Optoelectronics (NASDAQ:AAOI) rose, and Corning (NYSE:GLW) climbed on news of its own.

What Citi Is Betting On

Optical switching uses light rather than electrical signals to route data between servers and racks. As artificial intelligence clusters grow to tens of thousands of chips, the links between them have become a bottleneck, and the industry is racing to move more data with less power. Optical components, from lasers and transceivers to fiber itself, sit at the heart of that effort. Citi's $11 billion forecast framed optical switching as a meaningful new market by the end of the decade, and Lumentum management struck a confident tone, saying the Demand signal for 2027 continues to be incredibly strong.

Corning's Fiber Deal Adds Fuel

Corning signed a multiyear fiber and cable supply agreement with AT&T worth more than $3 billion. The deal supports AT&T's plan to reach 60 million Americans with fiber by 2030. Corning called the Partnership the next chapter, combining large, U.S.-based advanced Manufacturing with AT&T's network leadership. AT&T Chairman and CEO John Stankey said fiber remains the gold standard for superior internet connectivity. One report named Verizon as the partner, but other sources and AT&T's own chief executive identified AT&T. AT&T (NYSE:T) shares nonetheless slipped on the day.

Chips Joined the Bounce

The optical rally was part of a wider recovery in semiconductors and AI hardware. The VanEck semiconductor ETF, SMH, gained and the U.S. chip index rose. Applied Materials, Arm Holdings and Marvell Technology all climbed, though the recovery was uneven after a brutal prior session.

The Nasdaq-100 edged higher to 30,339.33 on the chip rally, even as the S&P 500 slipped 12.85 points to 7,670.84 and the Dow Jones Industrial Average fell 131.59 points to 51,349.92. The Nasdaq Composite ended nearly flat at 26,797.54. The 30-year Treasury Yield reached its highest level since 2002, and the 10-year touched its highest in roughly two decades.

Dates to Circle for Optical Bulls

Micron reports fiscal fourth-quarter results on Wednesday, September 30, offering fresh evidence on AI Data Center demand that often spills over into optical names. The same day brings August PCE Inflation data and the third estimate of second-quarter GDP, along with quarter-end trading. The September jobs report follows on Friday, October 2, with economists expecting about 95,000 new jobs, and the Federal Reserve's next policy meeting is October 27 to 28.