Lumentum Stock Surge: Will It Continue?

Lumentum's stock is up 1,444.1% over the past year and 157.72% year-to-date.

Q2 revenue reached $665.5 million, a 65% year-over-year increase.

Non-GAAP operating margin expanded 1,730 basis points to 25.2%.

The company has a $400M+ backlog in optical circuit switches and a $2B partnership with NVIDIA (NVDA).

Lumentum is operating at full capacity through calendar 2027, with pricing holding or increasing despite undershipping demand by 30%.

Optical Circuit Switches (OCS): The order backlog has surged past $400 million, with most shipments slated for the second half of the calendar year. The calendar 2026 exit rate is a crucial metric.

Co-Packaged Optics (CPO): Lumentum secured an additional multi-$100 million purchase order for ultra-high-power lasers, with shipments planned for 2027. The ability to deliver high power levels (400 milliwatts) sets Lumentum apart.

Capacity and Pricing: The company is undershipping demand by roughly 30%, and all EML capacity is spoken for through calendar 2027. Prices are stable or increasing.

Q: What is driving Lumentum's stock surge?

Q: What are Lumentum's key partnerships?

Lumentum is a key player in the AI infrastructure shift, focusing on optical components.

The company's financial performance has been strong, with significant revenue growth and expanding operating margins.

Keep an eye on OCS shipments, CPO orders, and the ability to maintain high margins.

Be aware of potential risks, including insider selling and high valuation metrics.