Lumentum said revenue jumped to $665.5 million in its fiscal second quarter, up 65% from a year earlier, as the photonics supplier raised its outlook and said demand tied to AI is keeping factories full through 2027. The company also posted non-GAAP earnings of $1.67 a share, ahead of the $1.41 expected, and said its non-GAAP operating margin widened to 25.2% from the prior year.
For investors watching Lite Stock ahead of results due after the close tomorrow, the numbers gave fresh fuel to a move that has already been extreme. Lumentum shares were up 1,444.1% over the past year and 157.72% year to date, trading at $981.17, above the average analyst target of $871.56, with a trailing price-to-earnings ratio of 278. The company has beaten estimates in all eight of its most recent quarters, a run that now looks tied to more than a short-lived demand spike.
Management said third-quarter revenue should come in between $780 million and $830 million, with non-GAAP earnings of $2.15 to $2.35 a share. Hurlston told investors the company is now being seen as a foundational part of the AI buildout, and the backlog reflects it: optical circuit switches have topped $400 million, with the majority of that business expected to ship in the second half of this calendar year. Lumentum also said it has a $2 billion partnership with NVIDIA, has all EML capacity spoken for through calendar 2027 and is operating at full capacity through calendar 2027 while still undershipping demand by roughly 30%.
The company’s latest update also showed how the AI trade has moved beyond chips and into the plumbing of the data center. Optical circuit switches and co-packaged optics are becoming more important for connectivity and power delivery, and Lumentum said it cleared its first $10 million optical circuit switches quarter three months ahead of schedule. It also secured an additional multi-$100 million order for ultra-high-power lasers, with shipments planned for 2027. Hurlston said the power requirement for that business, 400 milliwatts, is not something many companies can deliver.
The tension in the story is that the stock has already sprinted far ahead of traditional valuation measures even before the next earnings report lands. Wajid Ali said prices are holding or increasing for what customers want, but the real question now is not whether demand exists. It is how long Lumentum can convert that demand into shipments, margins and earnings while capacity stays pinned tight through 2027.