Lumentum

LITE

Market cap $55.9B

Nvidia announced financially significant partnerships with both Coherent and Lumentum to develop optical technology for AI data centers. Smaller optical stocks nLIGHT and Applied Optoelectronics jumped even higher despite not being part of the Nvidia deals.

While today's headlines are dominated by the escalating kinetic conflict with Iran, capital continues to pour into artificial intelligence infrastructure at an extraordinary pace.

Last December, JPMorgan analysts identified Lumentum Holdings ( NASDAQ:LITE ) as a key beneficiary of the multi-year upcycle in the optics sector, fueled by explosive hyperscaler spending on AI infrastructure and the rapid adoption of 800G+ datacom technologies.

New deals with Nvidia are giving two stocks a big boost on Monday.

Optical technologies are increasingly critical in data centers as they support energy-efficient, ultrahigh-bandwidth connections.

Nvidia will invest $2 billion in each company and secure optical networking capacity as it builds out AI infrastructure, sending Coherent and Lumentum shares higher.

Shares in Lumentum Holdings and Coherent Corp rose 8% and 6.5% respectively in premarket trading after Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) said it would invest $2 billion in each company to support research, development and manufacturing in the United States. Nvidia confirmed on Monday that the $4 billion combined investment will be directed towards photonic product development and expanded US production capacity at the two suppliers.

Nvidia is investing $2 billion in both Lumentum and Coherent as part of agreements to help accelerate advanced optics technologies for AI infrastructure.

Nvidia will invest $2 billion each in photonic product makers Lumentum and Coherent to support the companies' research and development and manufacturing operations in the U.S., the companies said on Monday.

Lumentum Holdings is positioned as a critical supplier of advanced lasers for AI data center interconnects, powering Nvidia's next-gen networking platforms. The structural shift to high-performance optical connectivity, especially 200G per lane EMLs, drives higher margins and revenue growth for Lumentum. An accelerating OCS backlog, now exceeding $400M, is a new growth driver for Lumentum.