Lumentum's Optical Component Capacity Fully Booked Through Early 2029 as AI Demand Surges
Key Facts
Lumentum Chief Executive Hurlston said production capacity for the company's optical components is fully booked through early 2029 as technology companies race to build faster data centers for artificial intelligence. Hurlston described the components as "fully booked," according to Seeking Alpha, in remarks covered in news reports on October 9, 2026. Demand pressure extends to products for which the company cannot supply the quantities required over the coming years. According to Hurlston's remarks reported by Investing.com, Lumentum cannot meet about 70% of demand for certain products through 2027. It also cannot meet about 30% of demand for other products through 2028, according to the same remarks.
The bookings come in a sector where Nvidia links the use of optical interconnects to improved energy efficiency in large AI networks, according to its statement on the partnership with Lumentum. The partnership includes a multibillion-dollar purchase commitment, alongside rights to access future production capacity for advanced laser components. Nvidia said in its statement that the agreement gives it "rights to access future production capacity" as part of arrangements to purchase these components. The agreement thus combines a commitment to buy Lumentum products with arrangements to secure the company's future output. Nvidia said the partnership is non-exclusive, with the agreement retaining the purchase commitments and capacity access rights.
Nvidia announced in March 2026 a $2 billion investment in Lumentum to support research and development, production capacity and operations. The manufacturing expansion includes a new factory in the United States, according to Nvidia's statement on the partnership between the companies. The new U.S. manufacturing capabilities are part of Lumentum's production expansion plan, alongside support for developing its technology and operations. But adding laser production takes time before new components reach buyers, Hurlston said. The chief executive warned, in remarks reported by Investing.com, that new laser production capacity takes about 3 years before its products reach customers.
On financial performance, Lumentum's revenue reached $1.01 billion in the fourth quarter of fiscal 2026, according to the company's earnings release. Sales grew 109.3% from the same period of the previous fiscal year, according to the quarterly results announced by the company. Revenue also rose 24.5% from the previous quarter, recording both annual and quarterly growth in the same period. Adjusted gross margin was 50.4%, according to Lumentum's non-GAAP measures. The company also reported adjusted diluted earnings per share of $3.23 for the fiscal fourth quarter, alongside its revenue and margin figures.
In premarket trading on October 9, 2026, Lumentum shares rose 3.8% following its chief executive's comments on demand, according to Investing.com. The gains extended to Coherent, which rose 3.5% before the open following Hurlston's remarks, according to the same website. Applied Optoelectronics shares climbed 7.3% in premarket trading as part of the rally in optical communications companies. Applied Optoelectronics posted the largest gain among the stocks mentioned, followed by Lumentum and then Coherent, according to the percentage increases tracked by the website. The moves in optical stocks coincided with comments on booked production and difficulty meeting demand for some products.
On longer-term orders, Hurlston said customers have begun "locking in orders for delivery in 2030," according to Investing.com. Lumentum's financial guidance targets revenue of between $1.225 billion and $1.275 billion for the first quarter of fiscal 2027. The company's statement identifies this range as its sales forecast for the quarter following the reported fiscal fourth-quarter results. Lumentum will announce its first-quarter fiscal 2027 results on Thursday, November 5, 2026, according to its earnings date announcement. The results are scheduled for release after the market closes that day, according to the timing set by the company.