Applied Optoelectronics Rips 24%, Lumentum Jumps 17%, Coherent Rallies 13% as Optics Trade Catches Fire

The optical-networking complex is ripping higher at midday Monday, with all three of the group’s marquee names posting double-digit gains. Applied Optoelectronics (NASDAQ:AAOI) is leading the basket, up 24% to $184.51, while Lumentum (NASDAQ:LITE | LITE Price Prediction) trades 17% higher near $1,057. Coherent (NYSE:COHR) rounds out the trio, up 13% to roughly $377.60.

The rally is essentially a mirror image of last Thursday’s sector-wide pullback, when AAOI, LITE, and COHR shares fell sharply in unison. Today’s bid reflects renewed enthusiasm for AI data center capex and the optical connectivity layer that links hyperscale GPU clusters.

Year to date, Applied Optoelectronics stock is up 420%, Lumentum shares are up 184%, and Coherent has gained 104%. Over the trailing year, those moves stretch to 1,136%, 1,516%, and 435%, respectively, for AAOI, LITE, and COHR stock.

Applied Optoelectronics Leads the Group

Applied Optoelectronics is the day’s standout, with AAOI stock advancing from Friday’s close of $148.94. The move follows the company’s Q1 FY2026 report last week and a sharp drawdown in the same session.

Applied Optoelectronics posted Q1 FY26 revenue of $151.14 million, growing 51% year over year (YoY) on surging demand for 800G transceivers used in AI workloads. The data center segment more than doubled to $81.4 million, including Applied Optoelectronics’ first volume shipment of 800G product to a large hyperscale customer.

Management guided Q2 revenue to $180 million to $198 million and signaled significantly larger sequential growth starting in Q3 as expanded Houston capacity comes online. Applied Optoelectronics CEO Thompson Lin pointed to “strong customer engagement around our 800G transceivers and 1.6 Tb products” as AI-driven data center investments accelerate.

Lumentum Extends Its Historic Run

Lumentum is climbing from Friday’s close near $904, extending one of the most extreme rallies in the entire optical components space. The fiscal Q2 2026 report from February still anchors the LITE bull case.

Lumentum’s fiscal Q2 revenue of $665.5 million grew 66% YoY, with non-GAAP EPS of $1.67 topping the $1.41 consensus. Fiscal Q3 FY2026 guidance calls for revenue of $780 million to $830 million, implying growth above 85% YoY.

Retail sentiment is leaning into the same narrative. One widely read r/StockMarket post argued that “Lumentum and Coherent are the only real ways to play that shift” as GPU clusters scale, drawing 81 comments and a Reddit sentiment score of 82 classified as very bullish.

Coherent Rounds Out the Rally

Coherent reported its fiscal Q3 FY2026 results last week, with revenue of $1.806 billion growing 21% YoY. Non-GAAP EPS of $1.41 marked Coherent’s fourth consecutive earnings beat.

The company’s Datacenter and Communications segment reached $1.36 billion, or 75% of revenue, growing 41%. Coherent’s expanding partnership with NVIDIA, including a $2 billion investment from the chipmaker, anchors a roadmap that includes doubling internal indium phosphide output by year-end.

Coherent recently joined the S&P 500, and CEO Jim Anderson cited “exceptionally strong demand across our datacenter and communications businesses.” Coherent’s Q4 FY2026 guidance of $1.91 billion to $2.05 billion keeps the AI demand thesis on track for COHR stock.

What to Watch Next

Bearish chatter is part of the conversation, too. A counterpoint r/stocks post asked, “Is there any value left in the AI supply chain?”, flagging that Coherent, Lumentum, and Ciena (NYSE:CIEN) shares are up 200-400% in 12 months with gross margins that don’t justify the multiples. After parabolic gains, the bar for continued upside is elevated.

The optics complex has now shown it can swing in either direction by double digits within just a few sessions, with last Thursday’s coordinated selloff and today’s coordinated rip as bookends. Customer concentration with a handful of hyperscalers means any pause in AI capex could ripple through Applied Optoelectronics, Lumentum, and Coherent simultaneously.

Keep an eye on whether the group holds gains into the close, the next round of sell-side price target revisions, and hyperscaler capex commentary. AAOI’s Q3 capacity ramp, Lumentum’s next quarterly update, and Coherent’s co-packaged optics and optical circuit switch revenue contribution through 2027 are the next real catalysts.