Lumentum Surges Nearly 10% as AI Optical Networking Stocks Rebound

Lumentum Holdings shares rose as much as 10% on Wednesday, closing near $906.76, making the company the top performer in the S&P 500 for the session. The gain came as optical and photonic networking stocks broadly rebounded after a sharp selloff earlier in the week tied to concerns about a slowdown in AI data-center spending. Peer Coherent also climbed roughly 7% on the day, while Corning posted smaller gains.

Analysts and investors are increasingly looking further down the AI data-center supply chain, focusing on component makers like Lumentum that supply optical interconnects and circuit-switching products for hyperscale facilities. The company had previously reported Q3 fiscal 2026 revenue of $808.4 million, up 90% year over year, with its co-packaged optics and optical circuit switch backlog already exceeding $400 million. That strong fundamental backdrop helped fuel Wednesday's recovery buying.

The VistaShares Artificial Intelligence Supercycle ETF, which holds Lumentum, gained about 3.1% on the day, with Semtech rising roughly 10.5% and Lumentum adding about 8.2% among its top contributors. In the broader market, the S&P 500 fell 0.40% and the Dow Jones Industrial Average dropped 1.21%, making the optical networking rally stand out sharply against a weak tape.