Key Highlights

● Applied Optoelectronics climbed on Tuesday, September 29, 2026, as optical-networking stocks recovered from a selloff.

● Citi forecast an $11 billion market for optical switching by 2030, which reset sentiment for the group.

● Corning signed a multiyear fiber and cable Supply deal with AT&T worth more than $3 billion.

● Micron reports fiscal fourth-quarter results on Wednesday, September 30, the next test for AI hardware sentiment.

Applied Optoelectronics, Inc. (NASDAQ:AAOI) climbed on Tuesday, September 29, 2026, riding a broad rebound in optical-networking stocks. The Texas-based maker of optical transceivers was among the day's gainers as the group recovered from a selloff and investors refocused on the long-term Demand story tied to AI data centers. The move stood out as the Russell 2000 finished lower.

The Citi Call That Reset the Mood

The trigger came a day earlier, when Citi forecast an $11 billion market for optical switching by 2030. Optical switches route data as light rather than converting it to electrical signals, which can save power and reduce delays inside large AI clusters. A second catalyst helped: Corning signed a multiyear fiber and cable supply deal with AT&T worth more than $3 billion, supporting AT&T's plan to reach 60 million Americans with fiber by 2030. Some reports named Verizon as the partner, but AT&T is the counterparty best supported by sources.

A Sector-Wide Bounce

Lumentum climbed, trading near $972 at the close by one card, and Coherent also rose. Lumentum's management said the demand signal for 2027 continues to be incredibly strong.

What Applied Optoelectronics Does

The company designs and manufactures optical transceivers, lasers and related components used in data centers, cable television networks and telecom infrastructure. Transceivers convert electrical signals into light and back again, and hyperscale Data Center operators buy them in huge volumes as they wire up AI computing clusters. That exposure has made the stock one of the market's more volatile ways to trade the AI networking theme.

Chips Strong, Market Soft

The rebound fit into a strong day for semiconductors. The VanEck Semiconductor ETF rose, and chip-equipment names such as Applied Materials rallied. One market note said chip stocks are snapping back after a brutal session, but the recovery is anything but even. The Russell 2000 finished lower, with closing figures from different sources clustered between roughly 2,807 and 2,810.

The Next Test

Micron reports fiscal fourth-quarter results on Wednesday, September 30. Investors will look for signs that AI-related spending remains strong across the supply chain, which feeds directly into demand for optical components. GDP and August PCE arrive the same day, and the Fed meets on October 27 and 28.