Recently, I have been paying attention to investment opportunities in the leading stocks of the networking industry and found that this sector is truly different in 2026.

In the past, the networking industry was just about laying cables and installing WiFi devices, but now it’s completely different. AI computing demands are spilling over from the cloud to end devices, and the U.S. BEAD plan worth $42.5 billion has entered full-scale construction. The entire networking industry has upgraded into a new form of "AI transmission architecture." This is not just an upgrade of communication equipment but a systemic evolution of the entire supply chain—from materials, chips, and device manufacturing to end-user applications.

My understanding is that the reason leading networking stocks are worth watching is because they are caught in the middle of this wave driven by AI and infrastructure double engines. From upstream optical communication components and silicon photonics materials, to midstream switches and routers, and downstream Wi-Fi 7 share routers and low-earth orbit satellite devices, the entire industry chain is being redefined. Especially as 800G switches and CPO co-packaged optical technology enter their commercial year, traditional copper transmission has become a bottleneck, and optical communication technology has become the solution.

Taiwanese companies actually hold many advantages here. As a global leader in data center switches, ZTEK has a leading position in the 800G market and is actively developing 1.6T specifications, making it a top beneficiary of AI data center construction. Lianya benefits from silicon photonics and CPO technology trends, providing key laser chips and epitaxial materials, with a deep technological moat. Qijing’s product line is quite diverse, covering Wi-Fi 7, automotive networking, and Starlink supply chains, making it one of the Taiwanese companies most capable of connecting with the U.S. BEAD plan. StarLight focuses on high-end optical transceiver modules and performs steadily amid the 400G to 800G upgrade wave.

There are also some worth watching in the U.S. stock market. Arista Networks specializes in low-latency network solutions for AI training, with clients including Meta and Microsoft. Broadcom controls the core of networking chips, from Wi-Fi 7 to switch chips, being a key supplier. Corning, as a global leader in fiber optic materials, almost monopolizes the U.S. broadband construction due to the BEAD plan’s requirements for domestic fiber capacity. Lumentum’s breakthroughs in optical components and CPO fields make it a dark horse in this wave of AI optical communications.

However, investing in leading networking stocks also requires awareness of several risks. Government project funding is slow and highly scrutinized; performance is recognized in batches rather than a one-time explosion. If progress stalls, it’s easy to see a situation where “the theme is hot, but the financials show no money.” Technology upgrades are also a tough test—second-tier manufacturers that can’t meet CPO thresholds may be marginalized. Additionally, keep a close eye on inventory levels of major clients like Amazon and Google; if data center construction slows or Wi-Fi 7 upgrade waves don’t meet expectations, networking companies could face high inventory pressure. Geopolitical risks cannot be ignored either—BEAD requires a certain proportion of U.S. manufacturing, so Taiwanese firms must set up overseas factories to win bids, incurring extra costs.

There’s also valuation issues. Because networking stocks are labeled as “AI neural network” stocks, many have already reached historic high P/E ratios. Slightly lower-than-expected revenue growth can lead to sharp corrections. My advice is to focus on leading companies with technological barriers, avoid chasing high prices on stocks that only have themes without solid fundamentals, and also monitor project funding progress and inventory changes.

In 2026, leading networking stocks are indeed a promising main line, but only if you choose the right companies and the right timing.