As a core participant in the “Google TPU AI Computing Power Chain” and an indispensable optical module component supplier in the “NVIDIA AI GPU Computing Power Chain,” Lumentum (LITE) has attracted growing interest from financial institutions in its stock’s continuation of the 2025 bull market trajectory following the release of strong quarterly results and future outlook. This U.S.-based leader in optical module technology saw its stock price surge by 340% over the full year, making it a standout performer in the global AI computing power theme, with a year-to-date increase exceeding 56%. Market analysis suggests that Lumentum is a key beneficiary in the potentially multi-year computing power race between “Google TPU and NVIDIA GPU.” Regardless of whether the competition remains fierce or one side gains significant dominance, the optical module industry is likely to receive long-term benefits.
Lumentum’s recent earnings report indicates that, benefiting from the sustained strong demand for optical circuit switches and co-packaged optics technology, both its revenue and actual profits surpassed market expectations. For the quarter ending December 27, 2025, its net revenue reached $665.5 million, a significant year-over-year increase of 65.5%. Even more impressive, management provided guidance for the next fiscal quarter that far exceeded expectations, projecting revenue to be between $780 million and $830 million. At the midpoint, this represents a potential year-over-year growth of over 85% and a sequential growth of about 22%, demonstrating strong growth momentum. CEO Michael Hurlston stated that Lumentum is at the starting point of two major opportunities—optical circuit switches and co-packaged optics technology. As AI data centers experience explosive growth in bandwidth and energy efficiency requirements, the company is entering its strongest growth cycle in history.
Analyst Jeff Pu from GF Securities pointed out in a research note that Lumentum will continue to benefit from the major trend of the “AI Chip Dominator” NVIDIA accelerating its adoption of co-packaged optics (CPO) technology. In his report, he detailed that NVIDIA introduced a CPO-based switch at the 2025 GTC conference and plans to launch Quantum-X and Spectrum-X in the second half of 2025 and 2026, respectively. Jeff Pu expects the supply chain to begin ramping up gradually from Q2 2026, with accelerated volume growth in the second half of 2026 through 2027. He believes Lumentum will significantly benefit from the continued surge in demand for continuous-wave lasers.
Simultaneously, Lumentum is also an important supplier in Google’s TPU computing power ecosystem. Google has extensively integrated optical circuit switch clusters in its Jupiter/AI data center network to support TPU systems, and Lumentum’s OCS products are designed precisely for such large-scale AI/ML data center networks. Whether it’s the CPO technology explored by NVIDIA or the OCS architecture adopted by Google, their core requires high-performance light sources, lasers, and optical switching components, which is where Lumentum’s technological expertise lies. This enables Lumentum to deeply serve the expansion and upgrade needs of both mainstream AI computing power architectures.
Combined with stable demand from traditional telecom and industrial markets, Lumentum has largely set the tone for robust growth throughout the year and is poised to benefit continuously from the long-term wave of AI infrastructure development.
