New York, March 3, 2026, 10:55 ET — Regular session
- Lumentum dropped roughly 13% during morning hours, wiping out a chunk of Monday’s Nvidia-fueled gains.
- Nvidia’s $2 billion stake came in the form of convertible preferred stock, according to a filing, with shares priced at $695.31 each.
- Deal mechanics, capacity buildout plans, and the company’s March 17 OFC investor briefing are all on traders’ radar.
Lumentum Holdings Inc. shares slumped roughly 13% Tuesday. This follows a surge the previous day, after news broke that Nvidia planned a $2 billion investment in the optical components maker, securing future supply.
Stocks dropped across the board as sellers hit tech and chip shares. The Invesco QQQ Trust, which tracks the Nasdaq 100, slipped roughly 2.2%. Losses in the iShares Semiconductor ETF were steeper, falling about 5.5%.
Nvidia’s partnership draws attention thanks to its focus on photonics—moving data with light instead of traditional electrical signals—just as AI data centers run up against limits in power and bandwidth. “AI has reinvented computing,” Nvidia CEO Jensen Huang said as the companies announced the deal. 1
More specifics landed Monday in a regulatory filing. Lumentum disclosed it sold 2,876,415 Series A convertible preferred shares to Nvidia, pricing them at $695.31 each in a private placement. The preferred stock converts one-for-one into common, though the switch can’t happen until the U.S. antitrust waiting period under Hart-Scott-Rodino either runs out or gets cut short. 2
Nvidia on Monday announced a $2 billion investment in Coherent, a competing photonics supplier, targeting improvements for AI optics. Lumentum jumped roughly 5% at the open following the news. 3
Lumentum CEO Michael Hurlston pointed out that the deal isn’t just about capital—demand visibility factors in, too. Speaking at a Morgan Stanley conference on Monday, Hurlston added, “Perhaps more importantly, it came with ‘a multibillion-dollar purchase commitment.’” 4
Some of the earlier excitement had faded by Tuesday morning. Coherent dropped roughly 8%, while Nvidia slipped around 2%, with investors pulling away from semiconductors and related suppliers.
Lumentum set the preferred share filing price at $695.31, under its previous closing level—a point that often draws traders’ attention, since the deal could convert to common stock down the line. Shares kicked off with a steep drop, swinging across a wide band through the session.
The bigger story? Still tangled. The preferred shares can’t convert until the antitrust waiting period ends, and Lumentum faces the dual challenge of ramping up U.S. manufacturing and keeping pace with stricter delivery and quality standards from major AI clients.
Mark March 17—Lumentum’s investor briefing lands during the Optical Fiber Communication Conference in Los Angeles. The street wants more detail: sharper timelines for capacity, updates on the new fab, and just how fast Nvidia’s business starts hitting revenue. 5
