New York, February 3, 2026, 18:54 EST — After-hours trading
- After hours, shares jumped roughly 3% before swinging sharply following the earnings release.
- Both adjusted profit and revenue exceeded estimates, with the forecast also coming in above expectations.
- Management highlighted an optical-switch backlog exceeding $400 million, along with a new CPO order.
Shares of Lumentum Holdings Inc (LITE) jumped roughly 3% in after-hours trading Tuesday, settling at $435.10 after earlier surging as much as 17%.
This matters because investors see data-center optics as a barometer for how aggressively cloud firms are investing in AI infrastructure. One quarter won’t close the book, but a strong forecast can shift the conversation quickly.
Tuesday’s data drops amid a jittery market for AI-related stocks. Investors are zeroing in on which segments of the sector can keep lifting figures without cannibalizing future sales.
Adjusted earnings, which strip out costs like stock-based compensation and acquisition expenses, came in at $1.67 per share on $665.5 million in revenue for the quarter ending December 27—beating analyst forecasts. The company projected March-quarter revenue between $780 million and $830 million, with adjusted earnings per share in the range of $2.15 to $2.35, also topping consensus estimates, according to Investing.com data.
CEO Michael Hurlston highlighted the company’s “over 65 percent year-over-year revenue growth” and flagged “two substantial opportunities” in optical circuit switches and co-packaged optics. He revealed that demand has driven the optical-switch backlog “well beyond $400 million,” alongside receiving an “incremental multi-hundred-million-dollar” order linked to co-packaged optics, or CPO. Business Wire
On the earnings call, CFO Wajid Ali projected a non-GAAP operating margin between 30% and 31% for the current quarter. He added that hitting the $805 million sales midpoint would set a new quarterly revenue high.
Optical circuit switches, or OCS, direct light between servers inside data centers, while co-packaged optics bring optical links closer to the switching chips, reducing power use and heat. On the call, Kathy Ta told analysts the OCS backlog tops $400 million, with most shipments slated for the first half of fiscal 2027. She also noted that several customers contribute to that backlog.
The gains occurred despite a steep drop in U.S. stocks during regular hours, with the S&P 500 sliding 0.84% and the Nasdaq Composite tumbling 1.43%. Investors grew concerned over software margin pressures fueled by the swift pace of AI adoption.
Lumentum supplies optical components and systems for telecom and data-center networks, going head-to-head with competitors like Coherent. Investors are tuning out the brand names, zeroing in instead on whether cloud spending will continue driving demand for faster optics.
The setup can work against Lumentum too. Should hyperscalers pull back on orders or manufacturing delays occur during the ramp-up, the upbeat guidance may not hold. Co-packaged optics remains a challenge with lengthy lead times, demanding flawless execution to meet expectations.
Investors are set to dig deeper into the OCS and CPO progress during the company’s investor briefing at the Optical Fiber Communication Conference in Los Angeles on March 17, the firm announced.
