Demand Is Soaring, Stocks Are Pulling Back: The Two Faces of the AI Supply Chain This Week (2026 W26)
This week the AI supply chain showed two completely opposite faces. One is Micron: FY26 Q3 revenue up more than 4x year over year and a data center gross margin of 87% — demand almost absurdly strong. The other is the three optical leaders, AAOI, COHR and LITE — all beat on earnings, yet their stocks fell sharply in unison. One is surging, the other pulling back; which one is real?
1. Micron puts the "AI memory tax" in plain sight
At its FY26 Q3 earnings call on June 24, Micron reported revenue of USD 41.46B, far above the USD 35.84B consensus and up more than 4x year over year (source: CNBC, 6/24).
Even more important is gross margin: the core data center business unit posted revenue of USD 11.524B at an 87% gross margin; cloud memory posted USD 13.769B at 83% (sources: CNBC 6/24, SEC 8-K). The two AI-related business units together exceed USD 25B, both with gross margins above 80% — almost unthinkable in a memory industry where margins used to be in the single digits. HBM4 has been shipping in volume for NVIDIA Vera Rubin since March, ramping twice as fast as HBM3E 12-high, and next-quarter revenue guidance points to roughly USD 50B.
2. Every earnings report beat, yet stocks pulled back: the other face of optical communications
In the same week, the three optical leaders fell together: AAOI −13%, COHR −9%, LITE −8% (source: Yahoo Finance, 6/23). But the pullback wasn't about weak earnings — Coherent's FY26 Q3 revenue was USD 1.806B, up 21% year over year, its fourth straight quarterly beat; in early June, Ciena posted revenue up 40% and EPS up 290% year over year, yet still dropped as much as about 14% despite strong results (source: Fierce Network). The trigger was selling pressure in Korean tech stocks and cooling sentiment around AI capex — a valuation issue, not a demand issue.
3. Other structural signals this week: 1.6T, silicon photonics, InP, Taiwanese suppliers
2026 is "year one of 1.6T": full-year 1.6T shipments are expected to reach 850,000 units, up 280% year over year, with silicon photonics penetration estimated at 50–70% and the module market valued at USD 25–35B in 2026 (source: GlobeNewswire, 6/23). On the demand side, GB300 rack shipments are expected to reach 55,000 units in 2026, up 129% year over year, and NVIDIA's Spectrum-X co-packaged optics switches have entered volume production. On the supply side, China approved the first batch of 2026 InP substrate exports, Coherent is rapidly expanding InP capacity in Texas, and Taiwanese suppliers (Compeq, Plotech, LandMark Optoelectronics in epitaxy, TSMC COUPE) are positioning upstream (sources: DigiTimes, Taiwan News, 6/25).
That wraps up the key points of this article.
STT's full analysis — why "surging demand" and "falling stock prices" can both be true, whether this pullback is a correction or an entry point, and who is actually holding the "quiet bottleneck" that caps capacity across the whole industry — is available in the premium section.
Related reading
NVIDIA buys into optics: when optical communications turns from growth stock to index heavyweight: last week we broke down how NVIDIA's stake in Coherent changes the capital structure of optical communications — the prequel to this week's "valuation repricing."
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