The Bucket
~10 % of the Q4 2025 13F across two names — Lumentum (an outsized 8.7%) and Coherent. The bucket exists because as model and cluster sizes grow, the fraction of a training run’s wall-clock time spent in collective-communication operations grows superlinearly. Inter-GPU and inter-rack interconnect bandwidth has become a primary determinant of training throughput, and pluggable optics is the marginal supply.
Thesis
Three facts drive the bet:
- 800G and 1.6T pluggable optics are entering volume. Each NVIDIA GB200/GB300 NVL72 rack ships with hundreds of optical transceivers; each connection across a data-center spine adds another. Per-cluster optics dollar content is growing 3–5x with the GB200 generation.
- The supplier base is concentrated. Lumentum and Coherent (along with Coherent’s competitor Marvell-via-Inphi and Broadcom on the SerDes side) supply most of the laser components and full transceivers. A handful of Chinese names (Eoptolink, Innolight) round it out, but the US-China optics decoupling theme favors US-made content for hyperscaler buyers.
- Lumentum and Coherent are also coherent-optics plays for inter-DC interconnect. As model training spans multiple data-center campuses (the so-called “AI gigafactory” topology), wavelength-division-multiplexed coherent optics carry traffic between sites — another structural revenue layer.
Constituents
| Company | Ticker | Q4 2025 value | % of 13F | Sub-thesis |
|---|---|---|---|---|
| Lumentum | LITE | $478.6 M | 8.68% | Lasers + transceivers, cleanest pure-play |
| Coherent | COHR | $88.6 M | 1.61% | Lasers + DC optics + industrial |
| Bucket total | $567.2 M | 10.29% |
Position History
Both names were added in Q3 2025 as part of the broader Q3 expansion. Lumentum was sized aggressively from the start, becoming a top-5 holding immediately. Coherent was sized smaller, reflecting its more diversified revenue mix (industrial lasers, materials processing) outside the AI-optics tailwind.
Read-Through
The 5:1 sizing ratio between Lumentum and Coherent is the tell: the fund prefers the cleaner, less-diversified pure-play. This mirrors the broader portfolio pattern of preferring concentrated thematic exposure (CoreWeave for AI cloud, Bloom for on-site power, Intel for US fab) over diversified “pick the basket” expressions. The optics bucket also acts as an indirect NVIDIA exposure — Lumentum’s content per system grew when the GB200 design moved from copper to optical interconnects above the rack.