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When investors first rushed into the artificial intelligence (AI) trade, most of the attention went straight to the companies building powerful AI chips and large language models (LLMs). But as the industry matures, the spotlight is slowly widening. Investors are now starting to look at the companies working behind the scenes to keep all that AI infrastructure connected and running smoothly, and Lumentum Holdings (LITE) is becoming one of the names catching serious attention. At first glance, Lumentum does not look like a traditional AI stock.
The company is not building chatbots or designing headline-grabbing processors. Instead, it focuses on optical and photonic technologies that move data using light rather than standard electrical connections. That might sound technical, but the idea is simple. AI systems are becoming so large and data-intensive that faster communication between servers and chips is now critical. As AI data centers continue expanding, the amount of information being transferred every second is skyrocketing, creating a major bottleneck for existing networking infrastructure.
