Shares of Lumentum Holdings advanced approximately 4.6% during Monday's session, with the stock trading near $577 in after-hours activity. The gain extends a recent uptrend for the optical components manufacturer, which has become a notable player in the AI infrastructure market.
The rally occurred alongside a broader market shift toward growth and hardware stocks, helping lift the Nasdaq Composite by about 0.9%. Several peers in the fiber, optics, and networking sector also posted significant gains, including Coherent, Ciena, and Corning.
No new corporate announcements drove Monday's price action. Traders attributed the momentum to the company's recent financial report and updated guidance, released on February 3. For its fiscal second quarter, Lumentum posted revenue of $665.5 million and non-GAAP earnings of $1.67 per share.
More importantly, management provided a robust forecast for the current quarter. The company projects fiscal third-quarter revenue between $780 million and $830 million, with non-GAAP earnings per share expected in the range of $2.15 to $2.35. CEO Michael Hurlston anticipates year-over-year revenue growth exceeding 85%, fueled by demand for optical links and switching technology essential for AI data centers.
Hurlston highlighted two high-growth product categories. The company's optical circuit switch backlog has surpassed $400 million. Additionally, Lumentum secured an incremental multi-hundred-million-dollar order for co-packaged optics, scheduled for delivery in the first half of calendar 2027.
Wall Street analysts have taken a more positive view following the guidance. Susquehanna's Christopher Rolland noted "dramatically better guidance" and improving margins in a recent research note.
Investors are now looking ahead to the company's investor briefing at the Optical Fiber Communication Conference in Los Angeles on March 17. The event is expected to provide updates on demand signals, order backlogs, and production capacity.
Despite the bullish sentiment, risks remain. The stock's sharp appreciation has elevated valuations, leaving it vulnerable to any signs of softening cloud capital expenditure, slower backlog conversion, or renewed supply chain constraints.
