You don't have to know the difference between a pump laser and a photon torpedo to understand why so many investors are captivated by optical networking stocks these days. All you have to do is to look at a stock chart or two. Like, oh, the chart for JDS Uniphase , the biggest gorilla in the fiber optic jungle, whose stock has risen an eye-popping 1059 percent in the last year. Or the chart for Spectra Diode Laboratories, otherwise known as SDL Inc. , which beat even this vaguely ludicrous result with a one-year return of 1392 percent. Finance message boards.
Signs point to yes.
The analysts covering the sector certainly have that attitude. Even as the fiber optic industry expands, the number of big players in the market is diminishing. In the last few months, JDS Uniphase has swallowed up rival E-Tek Dynamics and a handful of smaller firms. It's difficult for new entries in the optical sector to seriously challenge an established giant like JDS Uniphase, says Wong. There's a very big reliability requirement.