Lumentum Shares Jump 135% YTD: Can AI Momentum Sustain the Rally?

Lumentum LITE shares have surged 135% year to date (YTD), outperforming the broader Zacks Computer and Technology sector's return of 16.5%. The outperformance reflects investor optimism about the company's expanding role in artificial intelligence (AI) infrastructure, accelerating demand for optical connectivity and improving profitability. Strong hyperscaler spending, growing adoption of 1.6T optical transceivers, optical circuit switches (OCS) and next-generation laser technologies are strengthening Lumentum's growth prospects. These factors have helped LITE shares outperform peers, including Cisco Systems CSCO, Broadcom AVGO, and Coherent COHR YTD. Shares of Coherent and Cisco have returned 27.8% and 45.