Coherent and Lumentum shares pop on Nvidia deals. Why optical stocks are so hot these days.

Dow Jones03-02 23:25

MW Coherent and Lumentum shares pop on Nvidia deals. Why optical stocks are so hot these days.

By Britney Nguyen

Optical technologies are increasingly critical in data centers as they support energy-efficient, ultrahigh-bandwidth connections

Nvidia announced nonexclusive agreements with Coherent and Lumentum on Monday.

Shares of Coherent and Lumentum Holdings were climbing on Monday morning following Nvidia's announcements of multiyear agreements with both companies for artificial intelligence data-center components.

Nvidia (NVDA) said that its nonexclusive agreements with Coherent $(COHR)$ and Lumentum $(LITE)$ include multibillion-dollar purchase commitments for advanced laser systems and optical networking offerings. Under the agreements, Nvidia also has access to future offerings and capacity rights for products.

Nvidia is also investing $2 billion into each company, both for research and development, and to support the build out of manufacturing capacity in the U.S.

Coherent CEO Jim Anderson said in a statement that the expanded Nvidia relationship involves "multiple product families" of Coherent's technology for use in future AI data centers.

Optical interconnects and advanced packaging technology are critical to AI development, Nvidia said, as these components allow for energy-efficient, ultrahigh-bandwidth connections in data centers. Lumentum and Coherent are leaders in silicon photonics, which involves using light to move data between chips rather than electricity.

See more: Nvidia's earnings report is just a prelude to what should really matter for investors

Lumentum is investing in a new fabrication site to support its collaboration with Nvidia, CEO Michael Hurlston said in a statement.

Coherent's stock rose as much as 10% earlier in the session but had recently pared gains to be up 7.8% Lumentum's stock was up 4.7% after rising as much as 11.2% earlier in Monday's trading. Coherent's stock is up more than 50% on the year, while shares of Lumentum have more than doubled.

Meanwhile, Nvidia's stock was up about 1% on Monday morning following the optical deals and a fresh top-pick designation at Morgan Stanley. The chip maker's stock has been in a rut in recent months as investors worry about the sustainability of AI spending by hyperscalers.

All three stocks are bucking Monday's broader tech selloff that reflects a more risk-off stance in the wake of the Iran conflict.

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-Britney Nguyen

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March 02, 2026 10:25 ET (15:25 GMT)

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Coherent and Lumentum shares pop on Nvidia deals. Why optical stocks are so hot these days.

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