Nvidia CEO Jensen Huang Highlighted a New AI Bottleneck. 3 AI Stocks That Could Benefit.
Yahoo Finance ·
Energy and memory stocks have been pick-and-shovel winners in the artificial intelligence (AI) market as supply can't keep up with demand. But Nvidia has shown, through investments in companies working on network optimization and with photonics technology solutions, that a different AI bottleneck has been brewing. As more people become comfortable talking with chatbots and using AI agents , expectations for quick responses rise. To improve the bots' speed, photonics technology uses light to move data, boosting the efficiency of data transferring between chips and servers. "The amount of silicon photonics technology capacity that we need is substantially higher than the world has today," Nvidia CEO Jensen Huang said at a conference in March. That puts the spotlight on three companies Nvidia has invested in: Coherent ( COHR 9.75% ) , Lumentum Holdings ( LITE 9.09% ) , and Nokia ( NOK 6.51% ) . In March, Nvidia announced it would invest $2 billion in Coherent and that the two had formed a strategic agreement. The deal gives Nvidia future access and capacity rights to Coherent's advanced laser and optical networking products, while the $2 billion investment is expected to support research and development. As of March 31, Nvidia's stake in Coherent was just under 4%.
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