By Hannah Pedone and Philip van Doorn
Investors are pouring money quickly into a new ETF that invests in companies involved with photonics and photolithography
Extreme ultraviolet (EUV) lithography is a high-growth specialty within the semiconductor industry.
Investors looking for new ways to play the artificial-intelligence rush have found ample opportunity among optical-connectivity stocks.
Numerous companies focus on optical communications within data centers, as well as technologies such as photonics and photolithography that use light to transfer circuit patterns to chips. The likes of Lumentum Holdings (LITE), Ciena (CIEN) and Corning (GLW) all have optical businesses, and their shares all rank within the top 10 performers in the S&amp;P 500 SPX so far this year.
Now, there's a new exchange-traded fund focused on the optical theme. Earlier this morning, Corgi Funds launched the Corgi Lithography &amp; Semiconductor Photonics ETF EUV, which is actively managed so that at least 80% of its portfolio will be invested in companies that are &#34;materially involved in the development, deployment and operation of photonics and light-based technologies, including extreme ultraviolet (EUV) lithography and related semiconductor manufacturing and inspection tools,&#34; according to the fund's prospectus.
The ETF already has $93 million in assets under management. EUV currently holds 39 stocks; the largest holding is Taiwan Semiconductor Manufacturing (TSM), which makes up 9.6% of the portfolio. TSM makes use of the expensive EUV machines produced by ASML Holding (ASML).
Isaac Hargett, a portfolio manager at Corgi Strategies, told MarketWatch that the fund can hold companies of all sizes. Along with &#34;large conglomerates that are materially involved&#34; in optics and photonics, there are also &#34;peer plays&#34; held by the fund, he noted.
ASML, which specializes in EUV technology, is the second-largest holding of EUV and makes up 8% of the portfolio.
Screening optical and photonics stocks
To screen these semiconductor industries, we began with the 39 holdings of EUV, all of which are companies based in developed markets, and added three major players within the optical-communications space: Broadcom (AVGO), Nvidia (NVDA) and Cisco Systems (CSCO).
We then narrowed the list to 29 companies covered by at least five analysts working for brokerage or research firms polled by LSEG, for which consensus revenue estimates are available through 2028.
This group of growth stocks isn't cheap relative to consensus 12-month earnings-per-share estimates. On that basis, the EUV portfolio trades at a weighted forward price-to-earnings multiple of 40.6. This compares with a forward P/E of 20.9 for the S&amp;P 500, and 27.1 for the iShares Semiconductor ETF SOXX.
This screen is based on projected compound annual growth rates (CAGR) for revenue, based on consensus sales estimates, adjusted by LSEG to match calendar years for companies (such as Nvidia) whose fiscal periods don't match the calendar.
Among the remaining 29 stocks, these 15 have the highest projected revenue CAGR from 2026 through 2028:
These two-year revenue CAGR projections compare with weighted projected growth rates of 7.8% for the S&amp;P 500 and 19.1% for the S&amp;P 500's information-technology sector XX:SP500.45, according to LSEG's data.
Needham analyst Ryan Koontz told MarketWatch that Lumentum has been his &#34;top coverage pick for 18 months straight.&#34; He is bullish on both Lumentum and Ciena given their high exposure to hyperscaler spending, he wrote in a note earlier this year.
Koontz explained that despite concerns over a future slowdown in hyperscaler capital expenditures, he expects pricing for components to rise disproportionately to that slowdown. That's because optical connections are increasingly replacing copper-based ones in data centers. Additionally, new networking technology focused on optical circuit switching is rising in popularity.
According to Koontz, each new family of graphics processing units - like the leap from Nvidia's Hopper to Blackwell chips - drives &#34;a step-up in optical-interconnect performance and cost.&#34; That should keep demand growing, he said.
He also named diversified companies Broadcom, Tower Semiconductor (TSEM) and Marvell Technology (MRVL) as his other favorites.
-Hannah Pedone -Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
05-15-26 1614ET

ASML

CIEN

LITE

ASMG

Investors are increasingly turning to a new ETF focused on photonics and photolithography, with $93 million in assets. The Corgi Lithography & Semiconductor Photonics ETF EUV includes major companies like Taiwan Semiconductor Manufacturing and ASML. Analysts highlight Lumentum and Ciena as top picks due to their exposure to hyperscaler spending, despite potential slowdowns. The ETF's portfolio trades at a high forward P/E of 40.6, indicating strong growth expectations in the optical technology sector.

- Investors are rapidly investing in the newly launched Corgi Lithography & Semiconductor Photonics ETF (EUV), which focuses on companies in photonics and photolithography.  
- The ETF currently has $93 million in assets, with major holdings including Taiwan Semiconductor Manufacturing and ASML Holding, and a weighted forward price-to-earnings multiple of 40.6.  
- Analysts highlight strong growth potential in optical-related stocks, driven by increasing demand for optical connections in data centers and advancements in semiconductor technologies.

Dow Jones

Taiwan Semiconductor

Ciena

Lumentum

Corgi Lithography & Smcndctr Phtncs ETF

Leverage Shares 2X Long ASML Daily ETF

Corning

S&P 500

Broadcom

NVIDIA

Cisco

iShares Semiconductor ETF

Tower Semicon

Marvell Tech

NVIDIA Corporation

Optical stocks are booming. Here's how to invest in one of the most explosive areas of tech.