Lumentum sales more than double amid surging AI demand

Lumentum Holdings just turned in the kind of quarter that makes Wall Street analysts double-check their spreadsheets. The optical networking company reported $1.01 billion in revenue for the fourth quarter of fiscal year 2026, more than doubling the $480.7 million it pulled in during the same period last year.

Lasers are the new gold rush

Lumentum’s Components segment has been doing the heavy lifting, growing over 77% year-over-year in recent quarters. The stars of the show are products most people have never heard of: electro-absorption modulated laser (EML) chips and pump lasers. Certain EML lasers are seeing demand outstrip supply by more than 30%. CEO Michael Hurlston described the situation as demand being “through the roof” with no end in sight. The company expects to be completely sold out in some critical product areas through 2028.

Narrow-linewidth lasers saw year-over-year growth exceeding 120% in one quarter. Pump lasers weren’t far behind at 80% growth.

The company’s Optical Circuit Switches, or OCS, are adding another dimension to the growth story. Lumentum’s backlog for these switches crossed $400 million earlier this year, with quarterly shipment run rates already topping $10 million.

From telecom survivor to AI infrastructure supplier

Lumentum has been deliberately repositioning itself as a critical supplier to AI data centers. Instead of navigating the feast-or-famine dynamics of carrier spending cycles, the company now has multi-year demand visibility tied to sustained cloud operator capex.

What this means for the AI supply chain

The supply-demand imbalance in EML lasers, with demand exceeding supply by more than 30%, highlights a potential bottleneck that could create constraints rippling through the data center construction timeline. Cloud providers planning new facilities or expanding existing ones may find themselves competing for limited supplies of the very components that make high-speed AI networking possible.

The company’s sold-out status through 2028 in key product areas suggests this isn’t a one-quarter sugar rush, and its ability to capitalize on that wave will depend on how quickly it can expand manufacturing capacity to close the gap between what customers want and what it can actually ship.

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