Hooked on Photonics: Dumb and Dumber for JDS Uniphase

Even though everyone knows fiber optics are cool, it takes a special intelligence to appreciate their allure.
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There's nothing quite like being the dumbest person within a one-mile radius.

JDS Uniphase

(JDSU)

is the next

Qualcomm

(QCOM) - Get Report

-- er, make that

America Online

(AOL)

. OK, it's the next

Dell

(DELL) - Get Report

. Doh! Let's just say JDS Uniphase is kicking backside and taking names in the stock market these days. Which means that fiber optics are cool.

Yes, cool.

And when you have a chance to make an easy one-hour pilgrimage to the epicenter of cool, you do it. This is the logic that brought me to

Photonics West 2000

in San Jose late last month. The motto of the event at the

McEnery Convention Center

-- home of a most excellent 1970s disco mosaic -- was "showcasing the power of light." Yeah, showcase that and the power of an almost threefold stock increase since the beginning of November for JDS Uniphase. Forget the light -- show me the dollar signs!

Fiber optics are all the rage. Everyone from that cute

George Gilder

to

George Soros

to 16 analysts with strong buy ratings on JDS Uniphase consider photonics an investment in our future. Think of

Kraft

-fattened America surfing the Net for years to come on a supercharged, nitro-burning racetrack littered with JDS Uniphase products, propelling the data along. We have a winner!

Coincident with the photonics shindig in San Jose,

J.P. Morgan's

Charles Willhoit upped his 12-month price target for JDS Uniphase to 300. (Shares of the company closed Friday down 4 5/8, or 2%, at 211 3/16.) "JDS Uniphase is the clear leader in the high-growth optical components space," Willhoit says. Cool city. (Willhoit rates JDS Uniphase a buy, and his firm hasn't performed underwriting services for the company.)

A picture of event efficiency, Photonics West 2000 staff made sure that within five minutes of my arrival, I had a copy of the

International Society for Optical Engineering's

summarized dissertations for the

Symposium on Integrated Optoelectronics Devices

(Wake up! Stay with me!) in hand.

Locked and loaded.

I strode out on the floor confidently. This was the new, big thing. New, big things attract the smart people, and I'm smart people. And they attract the money people. My suit is black, so I could pretend to be money people.

A few hundred booths played off the theme: aloof. No bimbos. No free T-shirts. No "Welcome. Let us entertain you with simple tricks and baubles." Nothing even resembling "Let us explain things to you in plain English."

Each lightly traveled booth offered a smallish table with either quarter-sized glass pebbles, quarter-sized ceramic ovals, some machine bigger than a bread box that featured a flashing green light (there's a laser inside, you moron) or a machine that looked like a small robotic caulking-gun monster down on all fours (that's a laser, you moron).

Rocky Mountain Instruments

got my first laugh with a sign that advertises that it has your needs covered from "AI203 through ZnSe."

"A show like this was really for the supergeeks who know the ins and outs of the optics side," says Chris LeBlanc of

Banc of America Securities

, trying to shrink my inferiority complex. "I don't know if they realize yet that they're really in demand."

There were at least three people resting their feet in each of the exhibit-floor tutorial stations: Laser Town Square, Imaging and Display Town Square and Photonics Town Square. I noticed the guys at

Optimax Systems

got really crazy by sending two reps in tie-dyed T-shirts. Pandering weenies! A poster from

Optical Coating Laboratory

(OCLI)

, soon to be acquired by none other than JDS Uniphase, blared the satirical, "Honey, I Shrunk the Spectrometer." That was quite a hoot, though quizzical because of the smaller-type assertion, "Oh, and I got rid of that grating thing, too!"

Apparently grating is an issue.

Again, LeBlanc makes a call for patience: "Optics was a custom-type business before. It was precise, but had low volumes. Telecom has changed that."

I see. Cool like

Morgan Fairchild

on the

Old Navy

commercials. Cool like

John Travolta

post-

Pulp Fiction

. This isn't coolsville! This is lame central. Mercifully, I see the booth for JDS Uniphase. I stand tall. This is my shining moment. Enough of this other junk.

With a few extra square feet than the little guys' booths, JDS Uniphase was strutting its stuff. I walked up to a table full of the robotic caulking guns, and a nice man came over. He lovingly explained that JDS Uniphase supplies this laser to manufacturers that build them into larger systems. Sensing my only opportunity to ask a question and prove myself a sentient being, I asked for examples of JDS Uniphase customers. The gentleman didn't say

Ciena

(CIEN) - Get Report

or any sort of communications equipment manufacturer. He said something about a genetics researcher.

Genetics? What the hell?!

He calmly assured me that although JDS Uniphase's communications products are growing at a rapid pace, "We're the cash-cow part of the business." And "we" would be? The semiconductor metrology, biotechnology and graphics arts side, of course. He mentioned

KLA-Tencor

(KLAC) - Get Report

as a customer, and I perked up. But as I stared blankly at the caulker of death and scanned my brain for any genetics-industry knowledge, I was unable to prove I was still sentient. Damn.

(On the cool side of the business, its customers ring some bells:

Lucent

(LU)

, Ciena,

Sycamore

(SCMR)

and

Nortel

(NT)

. JDS Uniphase manufactures components that go into systems. Lucent and pals make the systems. Telephone companies and their friends buy the systems. There, that was relatively painless.)

Sensing shellshock unnatural to the mostly academic and insider conference that is blissfully unaware of its impending coolness, he walked me over to a map of the world littered with JDS Uniphase operations across the globe. It's not just a telecom world, you see. For example, it takes a laser to scan pictures and make those big posters you see printed -- much like the map that showed how JDS Uniphase does a lot more than bring the Internet to sloth-like Americans faster.

As for greater detail on the part of JDS Uniphase that factored into genetics research, I'd mostly gone fetal and couldn't ask questions.

The next day on the phone, LeBlanc tried to coax me out of my funk with a group of friendlier bets, including

Alcatel

(ALA)

,

Siemens

(SMAWY)

, Lucent and Nortel -- companies that do photonics as merely a part of what they do. I felt slightly better.

(LeBlanc has lavished buy ratings on JDS Uniphase, Alcatel, Lucent and Nortel and doesn't currently cover Siemens. His firm has performed underwriting services for JDS Uniphase, but has no underwriting relationships with the others.)

So this is cool. If only it came with instructions and a money-back guarantee.

Tish Williams' column takes at look at the people who make Silicon Valley tick. In keeping with TSC's editorial policy, she doesn't own or short individual stocks, although she does own stock options in TheStreet.com. She also doesn't invest in hedge funds or other private investment partnerships. She waits breathlessly for your feedback at

twilliams@thestreet.com.