San Jose, California, May 11, 2026, 06:06 PDT
Lumentum Holdings is set to enter the Nasdaq-100 ahead of the opening bell on May 18, taking over CoStar Group’s spot and putting the optical-components company into the key large-cap tech index. The Nasdaq-100 includes 100 of Nasdaq’s biggest non-financial names.
Timing is key here: inclusion in the index can trigger buying by funds tracking the benchmark and expose Lumentum to a broader base of institutional investors. Nasdaq points out that the index guides more than 200 investment products with upwards of $600 billion in total assets, making the rebalance far more than a simple nameplate switch.
Early Monday, Lumentum shares pointed to $903.80 before the bell, putting its market cap near $86.9 billion. The company is set to take the spot of CoStar, which carried a valuation of around $13.6 billion.
Lumentum is fresh off a blistering rally. Shares have surged 145% so far this year, putting it sixth among S&P 500 names, according to MarketWatch, after a monster 339% jump in 2025. The company only landed in the S&P 500 in March, so this Nasdaq-100 entry marks its second major index win in just about two months.
Lumentum’s gear—optical and photonic tech that pushes data at high speeds for networks and data centers—just got a nod from the Nasdaq-100. CEO Michael Hurlston called the move proof of how essential Lumentum’s optical hardware has become to AI infrastructure. As data centers chase greater bandwidth and faster connections, he said, demand for these optical products keeps ticking up.
AI-driven demand pushed Lumentum’s operating case higher. For its fiscal third quarter, revenue jumped 90.1% year over year to $808.4 million, while GAAP net income landed at $144.2 million. Looking ahead, the company projects fourth-quarter revenue of $960 million to $1.01 billion. It sees non-GAAP operating margin—stripping out certain items—at 35% to 36%.
Targets are ticking up across Wall Street, but some analysts are flagging risks. Morgan Stanley’s Meta Marshall and Antonio Jaramillo told Barron’s that the sharp rally might bring “near-term digestion,” though they don’t see pricing power letting up. Fresh price targets landed at $1,130 from J.P. Morgan, $1,300 at Rosenblatt, and $900 from Morgan Stanley. Barron’s
The competitive read-through isn’t wide, but it matters. This year, Coherent moved up with Lumentum after Nvidia revealed new strategic stakes in both firms. Nvidia’s deal with Lumentum? $2 billion invested, multibillion-dollar purchase guarantees, and rights to future cutting-edge laser parts.
The index move doesn’t erase execution risk. Simply Wall St pegs Lumentum’s price-to-earnings ratio at roughly 145.8, far above the sector’s 37 average, and notes red flags including volatility and insider selling. Operationally, Hurlston told investors the firm is “significantly undershipping demand”—in other words, supply snags might keep a lid on short-term revenue until capacity can catch up. Simply Wall St
Next up: the May 18 rebalance. After that, Lumentum faces scrutiny over whether it can actually hit its June-quarter guidance. Index funds could end up buying shares—but if margins slip, supply stumbles, or AI data-center demand falls short of what traders now expect, don’t count on those funds to provide support.
