Yangtze Optical Fibre and Cable Joint Stock (YOFC) saw its shares surge 5.19% during Tuesday's intraday trading, following an upbeat analyst report highlighting the company's artificial intelligence (AI) prospects. The stock's impressive rally comes as investors react to Nomura's bullish stance on YOFC's future earnings potential.

Nomura analysts have identified AI as the key driver for YOFC's earnings growth. The company is poised to capitalize on the AI boom through its leadership in hallow-core fiber technology, which offers lower latency for data center transmission. YOFC management has indicated that commercialization of this cutting-edge fiber could begin as early as this year, potentially opening up new revenue streams for the company.

In light of these positive developments, Nomura has maintained its buy rating on YOFC and significantly raised its target price from HK$15.00 to HK$18.60. The upgrade is based on a higher estimated 2026 EPS forecast, reflecting the analysts' confidence in YOFC's long-term growth prospects. Additionally, the report suggests that YOFC's subsidiaries in optical transceiver and high-speed copper businesses could see further upside, contributing to the company's overall growth trajectory in the AI-driven market.