Jensen Huang's Words Sparked a 1,000% Surge and Plunge: Optical Communication and Equipment Stocks Require Careful Selection [Real Investment Techniques]

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As the global stock market continues to ride the wave of artificial intelligence (AI) investment fever, the optical communications and telecommunications equipment sectors are drawing significant attention. In particular, the expansion of data centers combined with the construction of optical communications infrastructure is fueling expectations that domestic companies in these fields will also benefit. However, experts point out that, unlike in the past when investment was driven solely by expectations, it is now necessary to select investments based on concrete performance and competitiveness.

Recently, the domestic stock market has witnessed sharp fluctuations in optical communications and telecommunications equipment stocks. Shares such as Inno Instrument, KwangJeonJa, Taihan Fiberoptics, Wooriro, and BitgwangJeonJa soared up to 1,000% in a short period before declining, showing a rollercoaster trend. Telecommunications equipment-related stocks such as KMW, RFHIC, and Solid have also risen two to three times compared to the beginning of the year.

The spark for the boom in optical communications stocks came from Jensen Huang, CEO of NVIDIA. At the 'GTC 2026' NVIDIA AI Conference held in the U.S. on March 17 (local time), CEO Jensen Huang publicly identified optical communications technology as a core element of next-generation AI computing infrastructure and mentioned plans for large-scale investment.

Optical communications transmit data by sending light through glass fibers-thinner than a human hair-unlike conventional copper wire-based communication, which uses electrical signals. Because light is used, the transmission speed is overwhelmingly fast, and the amount of data that can be sent at once is far greater than with copper wire.

Inside AI data centers, thousands to tens of thousands of high-performance GPUs (graphics processing units) are densely interconnected, and if data transfers between these devices slow down, the overall performance of the AI system deteriorates. Optical communications have thus emerged as the solution to this bottleneck. In particular, as related technologies such as silicon photonics rapidly advance, past issues such as vulnerability to shock and high optical transceiver costs are gradually being addressed.

In reality, the global telecommunications equipment industry is showing a clear divergence among its segments. While the wireless communications equipment sector is experiencing stagnation, demand for wired infrastructure and data centers-centered on optical communications-is rapidly increasing. U.S. telecom company AT&T, for instance, increased its capital expenditure (CAPEX) in the first quarter of this year by 13% year-on-year to USD 5.1 billion, with most of the increase being invested in wired infrastructure such as optical cables.

Lee Chanyoung, a researcher at Eugene Investment & Securities, analyzed, "With the rise of AI data centers, a much higher fiber density is now required compared to before, and at the moment, supply cannot keep pace with the growth in demand. This is also leading to continued increases in fiber prices."

Such changes are having a positive impact on domestic companies as well. As Korea's exports of optical cables and optical fibers to the U.S. have surged, there are signs of a trickle-down effect from the expansion of global demand. The structure is forming in which expanded AI investment leads to increased demand for telecommunications infrastructure, which in turn translates into improved performance for domestic equipment companies.

Another noteworthy aspect is the lagging demand that follows investment in optical infrastructure. Once optical cables are laid, there is a subsequent demand for Wi-Fi equipment and devices to actually deliver services to end users. This means that the benefits are spreading in stages within the telecommunications equipment industry.

Experts advise investing in companies that have actual business with U.S. firms and are expected to deliver tangible results. Kim Hongsik, a researcher at Hana Securities, stated, "Domestic interest in Korean optical communications companies has risen sharply this year due to the surge in U.S. optical communications equipment providers such as Lumentum and Coherent. However, at this point, it is necessary to be selective and identify companies with true potential."

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He explained, "If the U.S. strengthens regulations on Chinese equipment and components, American companies are likely to receive preferential treatment, and suppliers of components to these firms are highly likely to benefit as well. Therefore, even among domestic companies, it is important to focus portfolios on those that either compete with or supply parts to American firms."

He added, "Within the telecommunications equipment sector, the top picks are KMW, RFHIC, Solid, LIG Accuver-which is part of the LIG Nex1 group-and OE Solution."

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