New York, March 3, 2026, 16:57 EST — After-hours
Lumentum Holdings Inc dropped roughly 11.3% on Tuesday, last trading at $694.43 after hours—a steep drop-off following its recent climb on Nvidia’s data-center optics momentum. The shares ranged from $681.31 to $750.53, retreating sharply from Monday’s $783.25 close.
Lumentum’s slump stands out, since the company has turned into something of a bellwether for a broader wager—AI data centers swapping out copper for optical links, aiming to boost data flow and cut down on heat. Nvidia’s endorsement spotlighted that narrative, but after Tuesday’s selloff, the market remains undecided about just how much Nvidia’s support should move the needle.
Nvidia plans to put $2 billion into both Lumentum and competitor Coherent, the company announced Monday. The goal: harness photonics—moving data with light, not electricity—to help power quicker AI chips.
Things took a turn for the worse. Wall Street slipped, with investors on edge over the escalating Middle East conflict—energy prices could rise, inflation might stick around. The Nasdaq dropped 1%, while the S&P 500 shed roughly 0.9%.
Lumentum disclosed in an SEC filing that Nvidia picked up 2,876,415 shares of Series A convertible preferred stock, paying $695.31 each. The deal pulled in $2 billion in fresh cash via a private placement. While these preferred shares convert one-for-one into common stock, the filing makes clear that conversion is off-limits until the U.S. antitrust waiting period, as outlined by Hart-Scott-Rodino, either expires or is terminated.
Nvidia announced a nonexclusive, multiyear deal that comes with a multibillion-dollar purchase commitment and guarantees it future access to advanced laser components. The agreement coincides with Lumentum’s expansion into U.S. manufacturing at a new fabrication plant. “AI has reinvented computing and is driving the largest computing infrastructure buildout in history,” said Nvidia CEO Jensen Huang. Lumentum’s Michael Hurlston, for his part, said the new fab is aimed at “increas[ing] capacity and accelerate innovation.” SEC
Investors also have to weigh the potential downside. Since convertible preferred stock may turn into common shares, dilution for current holders becomes a risk—timing is now split between regulators and Lumentum’s ability to ramp up capacity smoothly.
Chief Financial Officer Ali Wajid unloaded 5,302 shares on Feb. 27, a filing revealed, executing the sale through a Rule 10b5-1 plan—essentially a prearranged trading schedule. After the move, Wajid’s holdings stood at 66,287 shares.
March 17 stands out as the next key date, with Lumentum set to hold an investor briefing during the OFC 2026 conference in Los Angeles. Traders will be watching for concrete updates on the fab buildout, plus details on how the Nvidia purchase commitment is actually shaping up.
