Coherent Corp. (COHR)

Training large models requires thousands of accelerators to exchange data with almost no latency. Electrical cable does not work at those speeds, so the links are optical — hence sharp demand growth for optical modules, where the company is one of the few able to make the fastest ones.

Beyond that line sit industrial lasers for cutting and welding, medical optics and materials for the semiconductor industry. Those parts are cyclical and depend on industrial investment, while data-centre optics grows independently of them.

The company was formed by merger and carries meaningful debt, which it is reducing. Risks: order concentration among a few cloud operators, price pressure in optical modules, and availability of rare materials. The company pays no dividend.