Rothschild has published a shortlist of companies it considers best placed to benefit from increased demand for the hardware that underpins AI data-center networks. The firms cited manufacture and supply critical parts such as optical transceivers, laser systems, AEC cables and customized Ethernet switching - elements Rothschild says are essential to support the large data flows required by artificial intelligence applications.
Lumentum
Rothschild highlights Lumentum for its focus on laser components and finished products including optical transceivers. The firm is due to bring roughly 80% additional capacity online over the next 18 months, a scale-up that Rothschild views as a direct benefit to Lumentum's core product lines. The capacity build-out has been facilitated in part by a recent $2 billion investment from NVIDIA.
In company-specific developments, Lumentum reported third-quarter results in which both earnings and revenue exceeded analyst expectations. BofA Securities subsequently raised its price target on the stock, citing what it sees as an improved margin outlook.
Coherent
Coherent is also named for its exposure to the accelerating market for optical transceivers and for incremental revenue potential from CPO and OCS product lines. Like Lumentum, Coherent has been a beneficiary of the $2 billion investment from NVIDIA, according to Rothschild.
Recent company news includes progress in silicon carbide technology intended for AI data centers. Stifel increased its price target on Coherent, and Rothschild Redburn initiated coverage with a Buy rating.
Celestica
Celestica makes Rothschild's list on the strength of revenue growth exceeding 50%, driven in large part by an expanding share of customized Ethernet switching. Rothschild notes that near-term switching revenues should receive additional support from major capex increases planned by hyperscalers in fiscal year 2026. That market dynamic has already translated into concrete demand, exemplified by a contract win at a hyperscaler for a 1.6Tbps CPO Ethernet switch.
Celestica has made its 1.6TbE AI data center switches available for order, and the company has seen several firms, including Aletheia Capital and CIBC, raise their price targets on its shares.
Credo
Rothschild draws attention to Credo's core business supplying AEC cables and cautions that market observers may be taking too binary a view on how a narrowing applicability of AEC could affect Credo's revenue trajectory.
Credo recently agreed to acquire DustPhotonics, a developer of silicon photonics technology. Following the acquisition announcement, Jefferies and Mizuho increased their price targets on Credo.
Overall, Rothschild's rankings emphasize companies it sees as strategically positioned to serve the expanding AI infrastructure market, particularly those that are securing substantial investments or scaling capacity in response to demand. The assessment centers on the supply chain for AI networking hardware - from lasers and transceivers to switching systems and optical interconnects - and on companies whose recent corporate and financial developments reflect that exposure.