Photonics: The Next Big AI Investment Opportunity?
- (1:00) - What Is Photonics and It’s Impact On AI?
- (6:10) - Where Should Investors Look For Photonic Investments?
- (11:45) - KraneShares Photonic and Optical ETF: LUMA
- (14:30) - KraneShares Public-Private AI & Technology ETF: AGIX
- (17:30) - KraneShares Global Humanoid Robotics and Physical AI Index ETF: KOID
- (23:20) - Episode Roundup: LITE, COHR, MRVL, EUV, FOTO, LAZR
- Podcast@Zacks.com
In this episode of ETF Spotlight, I speak with Derek Yan, Senior Investment Strategist at KraneShares, about photonics and the KraneShares Photonic and Optical ETF LUMA.
Photonics is emerging as a potential solution to one of AI's biggest challenges: moving data quickly and efficiently between chips in data centers. It involves transmitting data through photons using optical fibers instead of the traditional method of sending it via electrons through copper wire.
NVIDIA has invested $2 billion each in photonics companies Lumentum Holdings LITE and Coherent COHR. The AI giant also took a $2 billion stake in Marvell Technology MRVL to collaborate on the development of silicon photonics and other technologies.
According to Goldman Sachs, the total addressable market for AI optical networking is expected to reach $154 billion by 2028. Rising investments and acquisitions also highlight the growing importance of photonics in scaling AI capabilities.
Many photonics stocks have skyrocketed this year and still look expensive despite the brutal AI selloff in July. Should valuations be a concern for investors?
The actively managed LUMA seeks to provide exposure to companies around the world that develop optical interconnects, transceivers, fiber-optic cables, and other light-based infrastructure.
The KraneShares Artificial Intelligence and Technology Public and Private ETF AGIX holds a stake in Ayar Labs, a private company pioneering optical interconnects and co-packaged optics. NVIDIA, Advanced Micro Devices AMD, and Intel INTC have all invested in the company.
Other photonics ETFs include the Corgi Lithography & Semiconductor Photonics ETF EUV, Tuttle Capital Pure Play Photonics ETF FOTO, and Tema Photonics & Optical ETF LAZR.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.
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