Artificial intelligence (AI) infrastructure spending is poised to jump significantly in 2026, with a recent report from CNBC suggesting that the capital expenditures (capex) of the top four hyperscalers in the U.S. could soar to $700 billion this year. That would be a big jump over 2025's capex of $394 billion.
Semiconductor companies are likely to win big from this massive outlay, as they provide the basic building blocks that enable AI training and inference. Lumentum (LITE 8.15%) is among the semiconductor companies playing a central role in the proliferation of AI.
Shares of this company that sells optical and photonic networking components enabling high-speed transmission in AI data centers are already trading up 56% in 2026. It won't be surprising to see this stock delivering more gains this year, potentially becoming the best-performing AI chip stock of 2026.
Let's see why that may be the case.
Image source: Getty Images.
Lumentum is clocking stellar growth thanks to AI
Lumentum released its fiscal 2026 second-quarter results (for the period ended Dec. 27, 2025) on Feb. 3. The company reported a 66% year-over-year increase in revenue to $666 million, well ahead of the $652 million Wall Street estimate. Even better, the company's non-GAAP (generally accepted accounting principles) earnings jumped nearly 4x year over year to $1.67 per share, crushing the $1.41-per-share consensus expectation.
NASDAQ: LITE
Key Data Points
CEO Michael Hurlston remarked on the latest earnings call that Lumentum is playing a critical role in AI data centers:
We are now recognized as a foundational engine of the AI revolution. Virtually every AI network is powered by Lumentum technology, either through our direct hyperscaler partnerships or as the critical component supplier that enables our network equipment manufacturer customers.
Importantly, Lumentum expects to grow at a faster pace going forward, driven by its solid backlog, new contracts, and capacity expansion plans. The company has a backlog of more than $400 million for its optical circuit switches that enable high-speed transmission in data centers.
Meanwhile, the company received what it calls an incremental "multi-hundred-million-dollar" contract in co-packaged optics, which are deployed in custom AI processors for their higher bandwidth and energy efficiency.
Lumentum has been aggressively expanding capacity to meet the terrific end-market demand. It already achieved more than half of the targeted 40% capacity improvement in the previous quarter. Moreover, Lumentum plans to bring new capacity online at two of its plants in the U.K. and Japan later this year.
Accelerating growth should lead to more upside
Lumentum management anticipates an 85% year-over-year increase in revenue in the current quarter to $805 million at the midpoint of its guidance range. Its adjusted earnings forecast of $2.25 per share is almost 4x the earnings it clocked in the same period last year.
Analysts expect a 263% spike in Lumentum's earnings in the current fiscal year to $7.47 per share, followed by impressive jumps over the next couple of years as well.
Data by YCharts.
The company may deliver stronger growth as it brings more capacity online. That could pave the way for more upside in this technology stock, which is why investors can consider buying Lumentum before it jumps higher.
