New York, March 3, 2026, 06:42 (EST) — Premarket
- Lumentum shares jumped in premarket trading, boosted after Nvidia revealed a financing-and-supply agreement connected to AI data center optics.
- The $2 billion investment comes as new convertible preferred stock, according to a filing, with conversion to common shares possible once the required antitrust waiting period ends.
Lumentum Holdings Inc (LITE) jumped $82.55 to trade at $783.25 before the bell Tuesday, marking an 11.8% premarket gain in the U.S.
Nvidia is putting $2 billion apiece into Lumentum and fellow optical player Coherent, aiming to bring photonics—moving data with light instead of electricity—further into the guts of AI data centers.
The AI buildout faces a fresh set of constraints. These days, it’s not just about GPUs—optical links, lasers, and the packaging that shuttles data quickly are tightening the screws too, especially as power demands climb.
Nvidia’s investment in Lumentum came via a new Series A convertible preferred stock, according to a regulatory filing. The shares were sold privately. Lumentum noted the preferred stock converts to common stock on a one-for-one basis, but only after the Hart-Scott-Rodino antitrust waiting period ends or is terminated.
Nvidia outlined a non-exclusive deal in the joint statement, detailing multi-year supply commitments, future access to advanced laser component capacity, and purchase obligations. “AI has reinvented computing,” said Nvidia CEO Jensen Huang. Lumentum CEO Michael Hurlston added that the company is “also investing in a new fabrication facility.” Fintel
Stifel bumped its price target on Lumentum up to $800 from $480, sticking with a Buy rating. The firm pointed to what it considers increasing networking demand driven by AI rollouts.
Yet several factors could still throw things off. The antitrust review will decide the conversion timeline, and getting the new U.S. fab up and running might not deliver volume shipments overnight. Plus, since the deal isn’t exclusive, orders could shift if demand for AI falters.
Lumentum’s upcoming investor briefing at the Optical Fiber Communication Conference in Los Angeles, set for March 17, is the next key event on traders’ radar. They’ll be eyeing any fresh details on capacity plans, and especially on how fast those purchase commitments start contributing to revenue.
