After the S&P 500, Now the Nasdaq 100: Lumentum (LITE) Confirms the AI Optics Supercycle
Lumentum joins the Nasdaq 100 on May 18. FQ3 2026 revenue +90%, $400M OCS backlog, CPO deliveries scheduled for 2027. Consensus target sits above $1,100.
- Lumentum (LITE) joins the Nasdaq 100 on May 18, a double-index inclusion after the S&P 500, with CoStar ($13B cap) exiting
- FQ3 2026 revenue hit a record $808.4M, +90% YoY
- OCS backlog crossed $400M, CPO deliveries are slated for 2027, the Greensboro plant is scaling, and the consensus target sits above $1,100
Inclusion confirmed for May 18 · YTD +145% · Q3 revenue +90% · target price $1,100
Lumentum Holdings (LITE) joins the Nasdaq 100 before the open on May 18, after the Nasdaq Global Index Group made it official on May 8. It follows the company's S&P 500 inclusion in March 2026 — a double-index inclusion in two months.
The seat goes to LITE at the expense of CoStar Group (CSGP). While Lumentum's market cap swelled to roughly $70 billion, CoStar's halved this year alone to about $13 billion. It is a snapshot of how fast the AI infrastructure boom is reshuffling tech-sector market caps.
+145% YTD — what drove it
Lumentum is up roughly 145–150% year to date — the top performer in the S&P 500. The stock traded near $900–$904 on May 8, with the consensus analyst target above $1,100, leaving roughly 17% upside.
BNP Paribas set a $1,040 target, and Bank of America projects the AI optics market reaching as much as $90 billion by 2030.
FQ3 2026 — revenue +90%, a record quarter
The May 2026 FQ3 print is what moved the stock.
- Revenue $808.4M — +90.1% YoY, a record quarter
- Non-GAAP EPS $1.67 — well above the $1.41 guide
- Non-GAAP operating margin 25.2% — +1,700bp YoY
- FQ4 guide — revenue growth of 85%+ YoY
We are only at the starting line of two huge opportunities: OCS and CPO.
Four growth engines — OCS, CPO, InP, factory expansion
Lumentum's growth rests on four pillars.
- Optical Circuit Switching (OCS) — backlog crosses $400M, production scaling underway
- Co-Packaged Optics (CPO) — a cornerstone of next-generation AI servers; further hundreds of millions in fresh orders, deliveries scheduled for 1H 2027
- InP (Indium Phosphide) lasers — high-density optical components essential for AI clusters; volume ramp continues
- Greensboro, NC plant — 240,000 sq ft new facility; the company has framed a $2B-quarterly revenue roadmap
What Nasdaq 100 inclusion mechanically means
Inclusion forces QQQ and other Nasdaq 100 trackers to buy. Passive capital flows in automatically. The market saw this effect once in the S&P 500 inclusion; this is the second pass and provides short-term technical upside pressure.
What this says
Lumentum supplies the optical interconnects at the core of AI data centers. As Nvidia's next-generation AI accelerator clusters proliferate, intra-data-center optical demand grows structurally. With a $400M OCS backlog, fresh CPO orders, and a new factory all running in parallel, this is growth backed by results — not narrative.
The CoStar swap is more than a name change. It is a map of where AI infrastructure is making value inside the tech sector.
Frequently Asked Questions
Why does OCS matter for AI data centers?
Connecting thousands of GPUs in an AI cluster with light instead of electrical signals delivers higher speeds and lower power draw. OCS is the device that dynamically switches those optical paths. As cluster sizes grow, demand scales nonlinearly.
What is CPO?
Co-Packaged Optics integrates the optical components into the same package as the CPU/GPU. Shrinking the distance between chip and optics raises throughput and cuts energy loss. It is widely seen as the next-generation AI server architecture.
Does Nasdaq 100 inclusion really move the stock?
QQQ and other Nasdaq 100 trackers must buy on inclusion day. Given their AUM, that creates short-term mechanical upside. The catch: if the move is heavily pre-positioned, the inclusion-day effect itself can be limited.
Why was CoStar removed from the Nasdaq 100?
Its market cap shrank to about $13B, no longer meeting the index criteria. A slowdown in the real estate data market combined with elevated capex cut the share price roughly in half this year.
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