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Despite being labeled as 'overvalued' for the past three years, Nvidia (NVDA) has continued to deliver exceptional growth in the artificial ...
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AI Stocks Crushing Nvidia in 2026
12 days agoUS
While Nvidia has seen modest gains in 2026, Lumentum Holdings and Applied Materials have significantly outperformed it, driven by massive investments in AI infrastructure. These companies are crucial players in the AI ecosystem, providing essential components and equipment.
Key Insights
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Lumentum Holdings (LITE) has gained 121% in 2026 due to high demand for its optical and photonic components in data centers.
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Applied Materials (AMAT) has jumped 67% as a result of the booming semiconductor equipment market driven by AI.
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Lumentum’s revenue in the first nine months of fiscal 2026 increased by 72% year-over-year.
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Applied Materials anticipates a 23% year-over-year revenue jump in the current quarter.
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Analysts expect solid revenue growth for Lumentum, with the optical component market projected to grow at an annual rate of 21% through 2029.
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Applied Materials anticipates over 30% growth in its semiconductor equipment business this year and continued growth in 2027.
In-Depth Analysis
Lumentum Holdings manufactures optical and photonic components like lasers and transceivers, essential for high-speed connectivity in data centers. The demand for these components is driven by hyperscalers needing to reduce latency in AI model training and inference. This demand has led to a 72% increase in revenue in the first nine months of fiscal 2026.
Applied Materials benefits from the increasing demand for wafer and fabrication equipment (WFE) required to manufacture AI chips. The company’s revenue increased by 11% year-over-year in the second quarter of fiscal 2026, with expectations of a 23% jump in the current quarter. Partnerships with TSMC, Micron Technology, SK Hynix, and Samsung further solidify its position in the semiconductor equipment market.
These companies are capitalizing on the AI boom by providing critical infrastructure, resulting in significant stock gains and strong growth prospects.
FAQs
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Q: Why are Lumentum and Applied Materials outperforming Nvidia?
They provide essential components and equipment for AI infrastructure, experiencing high demand.
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Q: What is the growth outlook for Lumentum?
The optical component market is expected to grow at an annual rate of 21% through 2029.
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Q: How is Applied Materials benefiting from the AI boom?
Through increased demand for semiconductor equipment and partnerships with major industry players.
Key Takeaways
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Lumentum and Applied Materials are key players in the AI infrastructure space.
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These stocks have shown significant gains in 2026, outperforming Nvidia.
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Investors should consider the growth potential of companies providing essential AI infrastructure.
Discussion
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