Key Points
The AI data center buildout is driving demand for Lumentum's connectivity solutions.
The optical tech leader's growth is accelerating.
- 10 stocks we like better than Lumentum ›
Shares of Lumentum (NASDAQ: LITE) surged more than 40% this past week, according to data from S&P Global Market Intelligence, after its quarterly earnings report was well-received by investors.
Image source: Getty Images.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Business is booming
Lumentum's revenue jumped 65.5% year over year to $665.5 million in its fiscal 2026 second quarter, which ended on Dec. 27.
The company's optical and photonic technologies are key components of artificial intelligence (AI) and cloud computing systems, enabling faster, more efficient data transfer.
"We are now recognized as a foundational engine of the AI revolution," CEO Michael Hurlston said during a conference call with analysts. "Virtually every AI network is powered by Lumentum technology, either through our direct hyperscaler partnerships or as the critical component supplier that enables our network equipment manufacturer customers."
Moreover, Lumentum's profitability is improving as it scales its operations. Its adjusted operating margin expanded by 17 percentage points to 25.2%.
Lumentum's adjusted net income, in turn, skyrocketed by 380% to $143.9 million, or $1.67 per share. That was well above Wall Street's estimates, which had called for per-share profits of $1.41.
The AI data center buildout is still ramping up
For its fiscal third quarter, Lumentum expects revenue to grow roughly 85% to between $780 million and $830 million. Management also projects adjusted operating margins of 30% to 31% and earnings per share of $2.15 to $2.35.
"Our results continue to highlight the strength of our roadmaps for both optical components and systems, which make us mission-critical to the world's AI leaders," Hurlston said.
Should you buy stock in Lumentum right now?
Before you buy stock in Lumentum, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lumentum wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $443,299!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,136,601!*
Now, it’s worth noting Stock Advisor’s total average return is 914% — a market-crushing outperformance compared to 195% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 8, 2026.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Lumentum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
