A 12-month sweep of the Nasdaq’s biggest gainers turned up something Wall Street’s narrative struggles to absorb: three companies tagged as “communications equipment” each delivered more than 1,000% returns over the past year while Nvidia Corp. (NASDAQ:NVDA), the stock that supposedly defines the AI trade, returned 75%.

Lumentum Holdings Inc. (NASDAQ:LITE) gained 1,462%. Ondas Holdings Inc. (NASDAQ:ONDS) gained 1,119.11%. Applied Optoelectronics Inc. (NASDAQ:AAOI) gained 1,164%. Each return is more than 13 times what Nvidia delivered over the same window.

Why ‘Telecom’ Is The Wrong Label

These three stocks are all in the SPDR Telecom ETF (NYSE:XTL), although the sector tag may be misleading.

The Global Industry Classification Standard files all three under Communications Equipment, but none is a traditional telecom carrier or handset supplier.

Two are optical-component makers riding the same datacenter buildout that put Nvidia at the center of the AI trade. The third operates in a different lane entirely.

Lumentum makes optical and photonic components used inside hyperscaler datacenters, alongside commercial lasers for manufacturing and inspection. The thesis is straightforward: every Nvidia GPU cluster needs interconnects to talk to other clusters, and 800-gigabit and 1.6-terabit optical transceivers are the bottleneck.

As CapEx from Microsoft Corp. (NASDAQ:MSFT), Meta Platforms Inc. (NASDAQ:META), Alphabet Inc. (NASDAQ:GOOGL) and Amazon.com Inc.