Fiber Optic 'Super Cycle': Raising The Speed Limit On The Giagabahn's Last Mile
I's all about speed, not size.
The 14 stocks in the Telecom-Fiber Optics industry group have collectively jumped 49% from the start of July to Friday morning, as China binges on fiber-optic components to modernize its communications infrastructure, and as the U.S. races to grease the pathways delivering our Netflix and Facebook videos, search results from Alphabet's Google and the data that power companies like Apple and Amazon.com.
The convergence of those factors -- China's overhaul, Verizon Communications and AT&T's attempts to turbocharge U.S. fiber-optic networks to deliver 100 gigabytes of data a second, and Web 2.0 companies' moves to muscle up connections between their data centers -- has left a handful of younger network gear suppliers struggling to meet demand. It has also led some analysts to believe that the industry cycle which began last year might last a bit longer than the typical two- to three-year period of booms and busts past.
Let's say you live in Los Angeles, and like millions of others around the world, you want to watch a cat video online. To get to your laptop or phone screen, the data behind that silly cat might be pulled from a data center across the country. The video is broken down into bits of data -- ones and zeros converted into light -- that zip across hair-thin strands of fiber that span the nation.
That light-speed cross-country trip takes place on what is known as the "long haul" portion of the fiber-optic market. When that video's elemental matter hits Los Angeles, it enters what is called the "metro portion" of the fiber-optic network -- in effect the local-stop ring of fiber optics that picks up and drops off the texts, files, tweets, likes and map directions coursing to and from homes, businesses and cell towers. From there, the metro fiber-optic system eventually dumps the video data onto your screen.
http://www.investors.com/research/industry-snapshot/fiber-optic-components-snapper/
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