Lumentum LITE, Coherent COHR and Ciena (CIEN) climbed on Tuesday after a Reuters report said the Trump administration is preparing restrictions on Chinese-made optical transceivers used in data centers.
Lumentum, Coherent and Ciena were among the networking stocks reacting to the report. Lumentum rose about 13%, while Coherent gained roughly 12% and Ciena advanced about 9% in morning trading.
Optical transceivers are hardware modules that convert electrical signals into light for fiber-optic connections. They help connect data center equipment such as servers, switches and routers.
The proposed restrictions are aimed at limiting potential cybersecurity risks, including malware, data collection and service disruptions, the report said. The Federal Communications Commission is working on the measure and could release it before the end of the year.
Lumentum, Coherent and Ciena could face changes in the competitive landscape if Chinese suppliers are restricted from the U.S. market. Cisco (CSCO), Broadcom AVGO and Intel (INTC), which also make optical networking equipment, were up in premarket trading as investors assessed the potential impact.
