"Lumentum standing in the light" breaks into Nasdaq 100! AI data center rushes into the "optical interconnection era"

The Alphabet Inc. Class C TPU AI Computing Power Chain's most core participant, as well as the indispensable core optical/optical module component supplier for the "NVIDIA Corporation and AMD AI GPU Series AI Computing Power Chain," Lumentum (LITE.US) will soon become one of the components of the Nasdaq 100 index, replacing CoStar (CSGP.US). This change will take effect on Monday, May 18, 2026, before the opening of the US stock market. For the "AI super stock" Lumentum, which has surged 145% so far in 2026 and skyrocketed 345% in 2025, as well as for the recent investment theme of "standing in the light" sweeping the global stock market, this is a major positive catalyst. The investment theme of "standing in the light" refers to the investment craze in the data center optical interconnection/optical communication industry chain. In terms of the bullish outlook for Lumentum's stock price, more and more Wall Street financial institutions are bullish on the company's stock price, following its strong performance in 2025. Lumentum's stock price soared by 340% in 2025, making it an undeniable "super stock" in the global stock market. Its stock price has made remarkable gains so far this year, climbing an amazing 145%. The main reason why Lumentum's stock price trend so far in 2025 can be described as "bullish to the extreme" is that Lumentum is able to benefit from both the Alphabet Inc. Class C TPU AI computing power chain and the AI computing power chain dominated by NVIDIA Corporation. Whether it is the NVIDIA Corporation AI GPU computing power infrastructure cluster or the Alphabet Inc. Class C TPU cluster (TPU represents the AI ASIC technology route), they cannot do without the "optical interconnection and CPO optical high-speed interconnection capabilities represented by Lumentum". By joining the Nasdaq 100 index, known as the "global technology stock barometer," Lumentum has received a significant positive catalyst for both its fundamental prospects and the investment prospects of the optical interconnection industry chain. The inclusion of Lumentum in the index officially transitions it from a "niche supply chain target for AI data center optical interconnection" to a core asset in the global technology asset pool, signaling that the narrative of AI computing investments is shifting from a focus on "competition around a single point of AI GPU/ASIC computing power" towards "AI intelligent agent-driven artificial intelligence full-stack systems". In this shift in the AI narrative, data center CPUs, storage chips, and optical interconnection industry chains may be the biggest winners. Lumentum is fully benefiting from the AI infrastructure dividend! Regardless of whether NVIDIA Corporation's GPU or Alphabet Inc. Class C TPU technology route has the advantage, Lumentum is expected to continue its bullish trajectory on the stock market. In AI super clusters like TPU and GPU computing clusters, they share a common core characteristic: the need for high bandwidth, low latency, and highly efficient internal data center interconnection. Traditional copper cables or electronic switching solutions cannot meet the demand when expanded to thousands or even tens of thousands of chip scales, as power consumption and heat losses grow explosively. Optical interconnection technology (mainly including co-packaged optical CPO, silicon photon switch, and optical circuit switch OCS) can replace electrical signals with optical signals, significantly improving bandwidth density and efficiency in large-scale AI training/inference networks, reducing latency and power consumption. This growing demand for higher optical interconnect capacity is a common factor in GPU and TPU clusters. For example, NVIDIA Corporation's Spectrum-X/Quantum-X silicon photon network switches explicitly integrate laser and photon technologies to improve power efficiency and network capacity. Lumentum's high-performance lasers and optical components are an essential part of these switches. In Alphabet Inc. Class C's Jupiter/AI data center network system, OCS (optical circuit switch) clusters have been massively integrated into the architecture to support TPU AI systems and large-scale training/inference systems. Lumentum's R300/R64 OCS products are specifically tailored for "large cloud computing scales + AI/ML data center networks" - establishing optical connections directly between endpoints using MEMS optics, bypassing intermediate electrical switching and OEO conversion, with a focus on high port count, low latency, and low power consumption. In the future, especially in the case of NVIDIA Corporation's AI GPU computing cluster, Lumentum, due to substantial investment and long-term capacity and new research and development paths linked to NVIDIA Corporation, is likely to be a frontline core beneficiary in UHP laser/ELS/CPO/OCS and other core optical interconnection chains. Lumentum is likely to be a "key arms dealer" in the future wave of AI optical interconnection, especially vital for NVIDIA Corporation's GPU chain. Lumentum is considered the manufacturer of key components in optical communication (laser, optical component suppliers), and it also ships some optical module products and subsystems. However, its core technological advantage lies in its ability to independently construct the most basic light source and high-speed optical device platform. These components are widely integrated into various optical modules and optical communication systems in large AI data centers. Lumentum is not like Broadcom Inc., which focuses on switching ASIC/DSP platforms, nor is it like Coherent, which has a broad spectrum of optical companies with silicon photonics, VCSEL, and InP-on-silicon. Lumentum's real strength and attraction to Wall Street funds lie in its InP laser, EML, ultra-high-power laser (UHP), external laser sources, and OCS, which are the most difficult to scale up, with the highest technical barriers and the highest risk of technological bottlenecks in AI optical interconnection. Lumentum expects that by the end of the 2026 fiscal year, EML production capacity will increase by over 50% compared to 2025. The company has already launched about 40% of its InP expansion plans and predicts that by 2030, the annual compound growth rate of InP demand for AI data centers will reach 85%. Lumentum expects the annual compound growth rate (CAGR) of OCS shipments between 2025 and 2028 to exceed 150%, aiming to achieve over $1 billion in annual revenue by 2027. From the GPU arms race to the "optical interconnection" era, the AI computing infrastructure frenzy is pushing the optical interconnection industry chain to the core asset arena The bottleneck of AI computing power is shifting from the GPUs themselves to "how to interconnect GPUs at high speed, low power consumption, and low latency" among them. This shift signifies that the narrative of AI computing investments is shifting from "competition around a single point of AI GPU/ASIC computing power" to "AI intelligent agent-driven artificial intelligence full-stack systems". In this shift in the core AI narrative, data center CPUs, storage chips, and the optical interconnection industry chain may be the biggest winners. The European financial giant BNP Paribas recently released a research report stating that the urgent need for the rapidly growing ultra-large-scale AI data centers for optical interconnections and storage chip industry chains in severe "supply shortage" status is one of the two major technology sector investment themes preferred by this European institution. The most core participant in the Alphabet Inc. Class C TPU AI Computing Power Chain, as well as the indispensable core optical/optical module component supplier for the "NVIDIA Corporation and AMD AI GPU Series AI Computing Power Chain," Lumentum (LITE.US) recently announced that its orders may be fully booked until 2028, with NVIDIA Corporation directly investing $2 billion in advance to secure the majority of production capacity. Lumentum CEO Michael Hurlston stated that the capital expenditures of the US super-large-scale cloud service providers are enormous and show no signs of stopping, "We are increasingly falling behind demand. We expect that within two quarters, all of our production capacity until the end of 2028 will be sold out." At the technical level of AI data centers, both NVIDIA Corporation's InfiniBand and Alphabet Inc. Class C are exploring deeply into the era of CPO optics (co-packaging photon components near switches/ASIC to reduce latency and power consumption), as well as the OCS optical path system (using optical switches to replace electronic forwarding to reduce energy consumption and latency), requiring a large number of high-performance light sources, lasers, optical switches, and high-density optical interconnection modules to generate, transmit, and switch optical signals. Lumentum has deep technical expertise in these optoelectronic components (including high-efficiency lasers and exclusive optical modules supporting OCS/CPO), making it a foundational supplier for several high-performance AI network architectures. For Lumentum's fundamental prospects, the inclusion in the Nasdaq 100 brings three positive impacts: firstly, passive funds and index product allocations will improve liquidity and institutional holdings; secondly, the Nasdaq 100 status strengthens its "asset label" as a core supplier of AI computing infrastructure, aiding in the shift of valuation anchors from traditional optical communication cyclical stocks to AI computing infrastructure growth stocks; thirdly, the customer and industry signal becomes clearer - NVIDIA Corporation has strategically invested in Lumentum and Coherent among other optical interconnection suppliers and has secured long-term procurement, with Corning Inc also rising significantly due to expanding fiber optic connection products with NVIDIA Corporation, indicating that capital in the AI computing industry chain is spreading from "GPU dominance in the computing power investment theme" to "storage, optics, and power, among other areas". For the entire optical interconnection industry chain, this is an important catalyst. It signals that the market is beginning to recognize that AI data centers are not only benefiting from GPUs, HBM, and server liquid cooling modules, but also from the forefront silicon photon technology, high-speed optical interconnection network devices dominated by optical modules, lasers, optical chips, optical fiber, OCS, and CPO, which are becoming the core bottleneck assets of the next round of AI capital expenditure.