Lumentum Holdings, a San Jose-based manufacturer of optical and photonic products, has seen its stock surge 720.4% over the past year, significantly outpacing the S&P 500's 20.4% gain. In 2026, shares are up 157.9% compared to the index's 13.7% rise. The company's strong performance stems from growing demand for optical components used in AI data centres. Lumentum reported eighth consecutive quarters of revenue growth, with Q4 revenue reaching $1 billion, exceeding Wall Street's $988.6 million forecast. Adjusted EPS of $3.23 also beat expectations of $2.99. The company expects Q1 2027 revenue between $1.2 billion and $1.3 billion, with adjusted EPS of $4.05 to $4.35. The results have prompted widespread analyst price target upgrades, positioning Lumentum as a key hardware enabler in AI infrastructure development.

Lumentum Holdings is emerging as a major beneficiary of AI infrastructure growth, driven by surging demand for optical networking components that rapidly transmit data in AI data centres. Investment firm Rosenblatt Securities projects optical component production capacity could increase 12-fold between 2025 and 2030, yet supply will still trail demand by 50% in 2030. The photonics components supplier reported fiscal Q4 2026 results on 11 August, with revenue jumping 109% year-over-year to just over $1 billion, surpassing analyst estimates of $988 million. Non-GAAP operating margin expanded 21.6 percentage points to 36.6%, whilst adjusted earnings per share rose nearly 3.7 times to $3.23, beating the $2.97 consensus estimate. Shares rose more than 13% following the results announcement.

CNBC's Jim Cramer analysed the contrasting market reactions to earnings reports from optical technology companies Lumentum Holdings and Coherent Corp. on 12 August. Lumentum reported fourth quarter fiscal 2026 revenue of $1.01 billion, up 109% year-over-year, beating estimates. Non-GAAP earnings per share reached $3.23, exceeding expectations by $0.26. The company guided first quarter fiscal 2027 revenue between $1.225 billion and $1.275 billion, with EPS of $4.05 to $4.35. Coherent posted fourth quarter fiscal 2026 revenue of $2.05 billion, a 34% year-over-year increase, surpassing estimates by $70 million. Non-GAAP EPS of $1.74 beat expectations by $0.12. The company forecast first quarter fiscal 2027 revenue between $2.2 billion and $2.4 billion. Despite strong results, Coherent shares fell in after-hours trading following an 8% gain during regular hours. Cramer attributed the decline to profit-taking after the stock's earlier rally.