Lumentum joins Nasdaq-100 after soaring on AI infrastructure demand

Lumentum’s rapid climb is now big enough to reshape one of Wall Street’s most widely tracked benchmarks. Nasdaq said the San Jose-based optical and photonic company will join the Nasdaq-100 before the market opens on May 18, replacing CoStar Group, a change that gives the rally a direct test inside retirement accounts and index funds that mirror the benchmark.

The move matters because the Nasdaq-100 is tracked by more than 200 investment products with over $600 billion in assets under management globally. For pension plans, 401(k) allocations and other passive investors, Lumentum’s addition means the stock’s sharp run-up is no longer just a trader’s story. It becomes part of the automatic machinery of index investing, where performance can be amplified by mandatory buying rather than fundamentals alone.

Lumentum has earned the slot through a surge tied to AI infrastructure demand. MarketWatch reported the shares have gained nearly 150% so far in 2026, making Lumentum the sixth-best performer in the S&P 500 this year. At the time of the Nasdaq-100 announcement, the company carried a market value of about $70 billion, while CoStar Group’s market capitalization had fallen to about $13 billion and its shares had lost roughly half their value this year.

The company’s latest numbers help explain the enthusiasm. In its fiscal third-quarter 2026 results released on May 5, Lumentum posted record net revenue of $808.4 million, up 90% from a year earlier. GAAP net income came to $144.2 million, or $1.50 a diluted share, while non-GAAP net income reached $225.7 million, or $2.37 a share. Chief executive Michael Hurlston said the growth reflected margin expansion and strong demand tied to AI data-center scaling.

That demand story has been reinforced by a series of strategic moves. On March 2, Lumentum announced a partnership with NVIDIA to develop advanced optics technology, and on March 26 it said it would open a new U.S. manufacturing facility to produce advanced lasers for some of the world’s largest AI data centers. Lumentum describes itself as a global leader in optical and photonic technologies for AI, cloud computing and next-generation communications.

The question now is whether the stock’s surge reflects durable telecom and AI buildout or a momentum trade that has run too far ahead of itself. Its recent addition to the S&P 500 on March 10 already signaled that Lumentum had crossed into a new tier of market relevance. The Nasdaq-100 inclusion goes further, locking the stock into a broader institutional base just as investors debate how much of the AI boom is backed by orders, and how much by valuation.