Lumentum shares up 1,444.1% over past year as optical components become critical to AI data center infrastructure

Lumentum reported Q2 revenue of $665.5 million, up 65% year over year, with non-GAAP operating margin expanding 1,730 basis points to 25.2%. The company is guiding Q3 FY26 revenue of $780 million to $830 million (85%+ growth versus $425.2 million prior year) and non-GAAP EPS of $2.15 to $2.35 versus $0.57 prior year.

The company has a $2 billion strategic partnership with NVIDIA, a backlog exceeding $400 million in optical circuit switches (components that route data in data centers), and operations sold out through calendar 2027. CEO Michael Hurlston stated the company is "now recognized as a foundational engine of the AI revolution."

Lumentum is undershipping demand by roughly 30%, with all EML (electro-absorption modulated laser) capacity spoken for through calendar 2027. Management secured an additional multi-$100 million purchase order for ultra-high-power lasers with shipments slated for 2027, and noted that "prices are holding or they're increasing for what customers want."