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Photo: Yahoo Finance / Stocktwits

Lumentum Stock Drops 9.8% on Optics Sector Selloff

The Motley Fool2 min read5 sources

Why is Lumentum stock down today?

Lumentum (LITE) stock fell 9.8% on Monday to $995.41 after an optics-sector selloff, reversing last week's rally on its CEO's claim that AI optical parts are sold out through 2029.

Key numbers

Lumentum close$995.41-9.78% on the day
Year-to-date gain (midday)+170%after the drop (per [2])
Forward P/E43xper [2]
Market valueabout $100Bper [1]
Capacity sold out throughEarly 202930% of some demand unmet through 2028

What happened

Lumentum (LITE) stock fell 9.8% on Monday to $995.41 after an optics-sector selloff, reversing last week's rally on its CEO's claim that AI optical parts are sold out through 2029. Rivals Coherent and Applied Optoelectronics each dropped about 7% midday, while the broader S&P 500 fund was nearly flat. Lumentum's chief executive had said on Friday that its laser-based parts for AI data centers are effectively sold out through early 2029. On Monday, Broadcom's CEO warned that investors have set "very extreme expectations" for AI, which weighed on AI stocks.

Why it matters

Lumentum makes the lasers that move data inside AI data centers, so its shares are a quick read on how investors feel about the AI building boom. The drop shows that even a company with orders booked for years can fall sharply after a big run. Its shares were up about 170% this year and trade at about 43 times expected yearly profits (forward P/E). Nothing in its demand story changed on Monday; investors sold the whole group together.

Who this affects

Marketbearish
Medium impact
AI optics investors hit hard; wider market stayed flat.
Companymixed
Medium impact
Lumentum holders lost about 10% in a day; orders unchanged.
Competitorsbearish
Medium impact
Coherent and Applied Optoelectronics fell about 7% alongside Lumentum.
Industrymixed
Medium impact
Demand stays strong, but high valuations make prices swing sharply.

Lumentum vs Coherent, Applied Optoelectronics

LumentumLITE$996.95-10%+170%
CoherentCOHR$289.68-7%—
Applied OptoelectronicsAAOI$101.50-7%—

As of 2026-10-12

How we got here

  1. Lumentum CEO tells Bloomberg TV optical parts are effectively sold out through early 2029.

  2. Optics stocks rise overnight on the news; Lumentum later hits record highs that week.

  3. Broadcom CEO warns of 'very extreme expectations' for AI and funding limits.

  4. Lumentum closes at $995.41, down 9.78%, leading optics stocks lower.

What to watch

  • Whether optics stocks steady or keep sliding after Monday's group-wide drop2026-10-13
  • New Lumentum laser capacity in North Carolina and Japan; relief for buyers not expected before 20292029

Educational content only. Not investment advice.

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