JPMorgan turns to Nvidia-linked optical names after pullback, recommending investors buy Coherent and Lumentum

Nvidia’s expanding footprint in AI hardware is continuing to ripple through parts of the technology supply chain, with JPMorgan pointing to two optical-component suppliers after a recent market pullback. In a note covered by Yahoo Finance and Investopedia, the bank said it would recommend buying into shares of Coherent and Lumentum, both described as Nvidia-backed “optical” stocks.

Coherent and Lumentum supply equipment used to transmit data at high bandwidth, an essential function for the data-center networks that support large-scale AI training and inference. In the analyst framing, the appeal is tied to the broader buildout of AI systems that depend on fast, efficient optical communication rather than moving all data electronically.

The recommendation came after the shares of these companies slipped “lately,” according to the report. JPMorgan’s call indicates that the analysts viewed the decline as an opportunity rather than a warning that end-demand for data-center optics is weakening.

Because the published item did not provide additional figures, such as specific price levels, earnings revisions, or target numbers, details on what exactly drove the pullback and how JPMorgan quantified its conviction were not disclosed in the post. What is clear from the report is the direction of the stance, not the magnitude.

For investors, the underlying thesis is that Nvidia’s GPU-centered platform strategy increasingly requires a full-stack approach to networking and optical communications. Optical transceivers and related components can help manage the massive throughput demands created by AI clusters, where large volumes of data move between servers and across racks.

Coherent and Lumentum, as suppliers in that ecosystem, are also exposed to the pace and timing of data-center capex (capital expenditures). When hyperscalers and enterprise operators accelerate network upgrades, optical vendors can see stronger demand visibility. When spending expectations shift, their shares can move quickly, reflecting both sentiment and near-term order timing.

Still, the report does not spell out any new company-specific development, such as a contract win, product launch, or guidance change. JPMorgan’s “buy the dip” framing therefore appears to rest primarily on sector positioning and forward demand expectations rather than on discrete catalysts described in the coverage.

Looking ahead, investors will likely watch whether the optical names see order momentum from AI-network builds, and whether management teams provide clearer updates on customer spending plans and production ramp timelines. Any additional disclosure from JPMorgan, including updated estimates or risk factors, would also help clarify what the analysts are most confident about after the recent share pullback.