Key Highlights

  • For Coherent, it pointed to the broader optical and AI hardware selloff plus profit-taking, with no discrete company news verified.
  • The 10-year Treasury Yield climbed to its highest level since 2007, and the 30-year to its highest since 2004.
  • Marvell Technology, a big supplier of data-center networking chips, fell, as did Qualcomm, Intel, Arm, AMD and Micron.
  • The next read on AI hardware Demand comes on Wednesday, when Micron reports after the close.

Corning (NYSE:GLW), Coherent (NYSE:COHR) and Lumentum (NASDAQ:LITE) fell hard on Monday, September 28, as doubts about AI spending and a jump in bond yields hit the companies that wire the world's data centers.

The light-speed trade hits a wall

Every giant AI cluster depends on moving enormous amounts of data between chips, servers and buildings, and much of that travels as light through optical fiber and transceivers. That has made optical networking suppliers some of the most loved names in the AI infrastructure trade. On Monday, September 28, they were among the hardest hit.

Coherent fell sharply, and Lumentum dropped as well. Semtech (NASDAQ:SMTC), whose chips go into data-center connectivity, fell as well.

The OpenAI trigger

The spark was the same one that set off the wider chip selloff: reports that OpenAI had paused Training of some frontier models. Optical companies sell into the same data-center projects as the chipmakers, so a slowdown in model training could mean fewer new clusters and fewer high-speed links.

For Coherent, it pointed to the broader optical and AI hardware selloff plus profit-taking, with no discrete company news verified. Corning's decline was likewise tied to the optical and AI hardware retreat.

Big gains mean big profit-taking

These stocks had a lot of air beneath them. Semtech, for example, has more than doubled this year. When a crowded trade gets a scare, investors sitting on large gains often sell first and ask questions later.

Rising rates amplified the move. The 10-year Treasury yield climbed to its highest level since 2007, and the 30-year to its highest since 2004.

Part of a broad hardware retreat

The optical names were in plenty of company. Marvell Technology (NASDAQ:MRVL), a big supplier of data-center networking chips, fell, as did Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC), Arm (NASDAQ:ARM), AMD (NASDAQ:AMD) and Micron (NASDAQ:MU). Data-center equipment makers Vertiv (NYSE:VRT) and Modine Manufacturing (NYSE:MOD) also dropped. The Philadelphia Semiconductor index slid sharply and the Nasdaq Composite fell 248.34 points to 26,820.38.

Nvidia (NASDAQ:NVDA) was the notable exception, rising after it added $150 billion to its share buyback. That contrast showed investors separating companies with their own catalysts from those simply exposed to the theme. Across the market, decliners outnumbered advancers 2,054 to 678 on the NYSE, underscoring how little shelter there was.

Micron offers the next read on AI hardware demand

The next read on AI hardware demand comes on Wednesday, when Micron reports after the close. Analysts expect Revenue of about $50.75 billion, and any sign of strong or softening data-center orders will ripple through the optical group. OpenAI's DevDay on Tuesday may also shed light on its plans after the reported pause.

Broader forces matter too. The PCE Inflation report on Wednesday and the September jobs report on Friday will shape Treasury yields and expectations for another Fed hike in October. If yields ease, beaten-down hardware names could find buyers; if they keep climbing, the optical trade may stay under pressure.