A 10x stock in a year, and now there's another one

Ask AI · How do fiber-optic capacity bottlenecks drive the explosive growth of the AI industry chain?

On April 3, the AI industry chain surged again. By market close, the optical module sector rose more than 5%, optical-electrical circuit switches rose nearly 5%, and the fiber sector rose more than 2%.

The AI industry chain has arguably been a hotbed for standout stocks. According to data from DBS Securities, as of the close on April 2, there were already 11 stocks with maximum gains over the past one year exceeding 10 times; among the 10-bagger stocks were Source Photonics Technology, Honghe Technology, Changfei Optic Fiber, Dingtaik High-Tech, and others. On April 3, Tengjing Technology’s intraday high surpassed 340 yuan per share; compared with the low point on April 9, 2025, its maximum gain exceeded 10 times, officially completing the “ten-bagger in one year” journey.

Among them, Changfei Optic Fiber, Tengjing Technology, and others are fiber-concept stocks.

In terms of market news, according to Securities Times, the fiber industry is seeing a wave of price increases. In its latest research report, UBS cited data from the industry research institution CRU: in March, the price of Europe G652.D loose optical fiber was 7.94 euros per fiber kilometer (about 9.1 US dollars), up 136% from January, and up 159% year over year.

China Galaxy pointed out that, from the supply side, the core driver of this round of price increases is the fiber-optic preform-rod capacity bottleneck: preform rods account for about 70% of the profits in the industrial chain, have high technical barriers, and the capacity expansion cycle can last 18–24 months. In addition, after the early price war and the subsequent clearing of supply, expansion has remained limited, making it difficult for supply to keep up with demand growth. Currently, global preform-rod capacity is nearing full load; under capacity constraints, manufacturers have been shifting preform-rod resources toward special optical fibers with higher added value, such as G.657.A2 (for drones) and G.654.E (for AI data centers), thereby crowding out capacity for ordinary G.652.D optical fiber and exacerbating structural shortages. Overseas markets are also facing long expansion cycles for giants such as Corning and Fujikura, and in the short term the supply gap is unlikely to be alleviated.

Overall, over the coming period, there is the possibility that prices of optical fiber and cable of different models may rise further, and the profits brought by these price increases are also expected to be reinvested into R&D for cutting-edge technologies such as hollow-core optical fibers, forming a virtuous cycle.

China Galaxy suggests that this round of optical fiber and cable price increases is mainly driven by three major emerging demand sources: first, interconnection demand arising from large-scale construction of AI data centers; second, rapid volume growth in specialized application scenarios such as optical-fiber drones; and third, export demand supported by the continued expansion of overseas infrastructure markets. These demands have scale, and product structure is evolving toward high-end and specialized directions. The optical fiber industry may be entering a new round of structural transformation. It is recommended to pay attention to core optical fiber and cable manufacturers such as Changfei Optic Fiber, Hengtong Optic-Electric, Zhongtian Technology, FiberHome Communications, and Tongding Interconnection.

(Statement: The article content is for reference only and does not constitute investment advice. Investors act on their own and bear the risks.)