Lumentum Holdings (NASDAQ:LITE) CEO Michael Hurlston went on live television and said something you almost never hear from a public company executive: “We’re sold out really until the end of 2027. We see no end in sight.”
That’s not a forecast. That’s a filled order book.
What Lumentum Actually Does
Lumentum makes the optical and photonic components that move data inside and between AI data centers at the speed of light. Think of it as the plumbing for the AI buildout. Every time a hyperscaler adds GPU clusters, they need more fiber, more transceivers, more laser assemblies to connect it all. Lumentum makes those lasers and optical switches.
The two growth engines right now are optical circuit switches (OCS) and co-packaged optics (CPO). Hurlston called both “only at the starting line.” The OCS backlog alone exceeds $400 million, and the company recently received an incremental multi-hundred-million-dollar CPO order deliverable in the first half of calendar 2027.
The Supply Gap Nobody Is Talking About
Here’s a notable operational detail. Even running at full capacity, Lumentum is approximately 25-30% behind the demand being placed on it. The CEO’s words: “We are completely sold out.” The company is, in his framing, “way, way under-shipping” what customers want.
That’s not a bottleneck. That’s a structural supply constraint against a demand curve that, per the CEO, goes up every single day.
Hurlston also pushed back directly on the recurring prediction that the AI data center boom is about to end. Skeptics have called the top “next year,” “in six months,” and “in 18 months” repeatedly. None of it has materialized. He described roughly five years of visibility in the data center buildout cycle, driven by the return on investment that AI models are generating for the companies filling those data centers.
The Numbers Back It Up
This isn’t just talk. Q2 FY2026 revenue hit $665.5 million, up 65.5% year-over-year. Non-GAAP operating margin expanded 1,730 basis points to 25.2%. Q3 guidance calls for $780 million to $830 million in revenue, implying more than 85% year-over-year growth, with operating margins guided to 30% to 31%.
The stock is up 862% over the past year and 67% year-to-date. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) recently made a $2 billion investment in Lumentum alongside a multibillion-dollar purchase commitment. The company is also joining the S&P 500 effective March 23, 2026, which will bring automatic passive fund buying.
The valuation is rich at a trailing P/E of roughly 196x, and insiders have sold approximately $38.85 million in shares over the past 90 days. Those are real risks worth weighing against a backdrop of strong revenue growth, a filled order book through 2027, and a CEO who says demand continues to outpace supply.
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