Lumentum (LITE) Stock Rockets 16% After Nasdaq 100 Inclusion Announcement

Quick Summary

• Lumentum shares skyrocketed 16% to $1,053.09 on Monday following Nasdaq’s announcement that the company will enter the Nasdaq 100 index on May 18, taking CoStar Group’s place.
• The inclusion sparked automatic purchases from index funds, creating additional buying pressure beyond the stock’s existing upward trajectory.
• The company delivered record third-quarter revenue of $808.4 million, representing a 90% year-over-year increase, while gross margin grew 540 basis points sequentially.
• Fellow optical companies Coherent and Corning climbed 13% and 11% respectively, each reaching new all-time closing peaks.
• Lumentum shares have gained 186% this year and surged over 1,300% across the last 12 months, supported by a $2 billion investment from Nvidia.

Lumentum (LITE) shares reached an all-time closing peak of $1,053.09 on Monday, May 12, climbing 16% after Nasdaq revealed the optical networking company will become part of the Nasdaq 100 index on May 18, taking the spot currently held by CoStar Group (CSGP).

Lumentum Holdings Inc., LITE

The surge positioned Lumentum as the leading gainer in the S&P 500 during the trading session. By comparison, the broader S&P 500 and Dow Jones Industrial Average each advanced a modest 0.2% on the same day.

The Nasdaq 100 represents the 100 largest non-financial corporations listed on the Nasdaq exchange. Index additions trigger mandatory purchases from all funds that track the benchmark. This systematic buying pressure materialized quickly in the market.

Lumentum has now gained 186% since the start of the year. Looking back over the trailing 12 months, shares have exploded more than 1,300%.

The index announcement arrived just days following Lumentum’s fiscal third-quarter 2026 results released on May 5. The company achieved revenue of $808.4 million — establishing a new corporate record and marking a 90% jump year-over-year. The stock experienced approximately a 10% decline on May 6 and May 7 after revenue figures, though impressive, fell short of Wall Street’s heightened projections. By Friday the stock had bounced back, and Monday’s action confirmed the uptrend had resumed.

Profitability Metrics Show Significant Progress

Chief Executive Officer Michael Hurlston emphasized that margin improvement represented the more significant narrative. Gross margin rose 540 basis points from the previous quarter. Operating margin expanded by 700 basis points during the same timeframe.

Non-GAAP earnings per share reached $2.37 for the third quarter, compared to $0.57 in the corresponding period one year earlier. GAAP net income totaled $144.2 million, versus a loss of $44.1 million in Q3 fiscal year 2025.

The company closed the quarter holding $3.17 billion in cash and short-term investments, representing an increase of $2.02 billion from the preceding quarter, primarily attributable to a Series A Convertible Preferred Stock offering completed in March 2026.

For the fourth quarter, Lumentum projected revenue between $960 million and $1.01 billion — approximately 18% sequential expansion from Q3’s already-record performance. Non-GAAP earnings per share guidance was set at $2.85 to $3.05.

Optical Sector Experiences Broad Gains

Lumentum’s performance was echoed across the optical networking sector on Monday. Coherent advanced 13% to $379.69 while Corning surged 11% to $207.39. These three optical networking stocks occupied the top three positions in the S&P 500 for the day, with both Coherent and Corning also establishing record closing levels.

Coherent has climbed 106% year-to-date. Corning has jumped 136% since January and 342% over the past year.

In March, Nvidia disclosed $2 billion equity investments in both Lumentum and Coherent, coupled with multibillion-dollar procurement agreements with each organization.

Bank of America added Corning to its “U.S. 1 List” on Monday — the investment bank’s curated selection of top investment ideas.

Hurlston highlighted co-packaged optics and optical circuit switches as emerging growth catalysts still in their initial phases. “As our key growth drivers of co-packaged optics and optical circuit switches begin to kick in,” he stated, “we would expect further increases in earnings power.”