NEW YORK, February 6, 2026, 13:03 EST — Regular session
Lumentum Holdings Inc shares jumped roughly 8% on Friday, pushing the price to $544.68 in early afternoon trading. The Nasdaq-listed stock swung between $499.49 and $556.71, closing up $40.26 on volume near 3.6 million shares.
Traders are snapping up shares in companies tied to data center supply chains as Big Tech ramps up AI spending for another year. Alphabet, Microsoft, Amazon, and Meta are projected to pour over $630 billion into AI this year alone. Alphabet also revealed its 2026 capital expenditure could hit $185 billion. But Morgan Stanley analysts caution that “investors right now are not forgiving about large investments without clear signal on return on invested capital.” 1
That capex goes straight to racks, chips, and the tangled wiring that links them all. Optical components also factor in, shuttling data between servers as demand ramps up.
Lumentum, headquartered in San Jose, California, posted fiscal Q2 revenue of $665.5 million and non-GAAP earnings of $1.67 per share on Feb. 3. Its guidance suggests growth ahead, with third-quarter revenue expected between $780 million and $830 million, and non-GAAP EPS projected at $2.15 to $2.35. CEO Michael Hurlston noted, “Revenue hit the high end of our guidance range.” He also highlighted a backlog topping $400 million for optical circuit switches and revealed the company secured an additional multi-hundred-million-dollar co-packaged optics order set for delivery in H1 2027. 2
Non-GAAP reflects the company’s adjusted profit, excluding what it considers non-recurring or non-cash items. Optical circuit switches, or OCS, direct light between servers to reduce bottlenecks. Co-packaged optics, or CPO, places optical links nearer to chips, helping lower power use and heat.
Peer Coherent Corp jumped roughly 9.7% on Friday.
For Lumentum, the key issue now is timing. Investors are watching closely to see how quickly the backlog converts into shipments and if the margin gains stick as production scales up.
The AI trade has been volatile, with hefty spending plans sparking both excitement and concern. Tom Hainlin, investment strategist at U.S. Bank Wealth Management, noted that markets are trying to decide if this capex cycle “will translate, ultimately, into results.” 3
Traders keep circling the risk that if cloud customers halt orders or new product launches delay, the stock could quickly lose its gains.
Lumentum plans its next major event with an investor briefing at the Optical Fiber Communication Conference (OFC) on March 17 in Los Angeles, running from 10:15 to 11:45 a.m. PT. Market watchers will be paying close attention for updates on optical circuit switch demand and any shifts in the timeline for co-packaged optics delivery. 4
