- In late June 2026, Lumentum Holdings Inc. was removed from multiple Russell equity benchmarks, including the Russell 2500 Index and several Russell 3000 and Midcap Value indices, following the latest annual reconstitution.
- This broad index exit comes as Lumentum highlights its role in supplying advanced lasers and optics for AI data centers, including a multiyear indium phosphide laser commitment with Nvidia.
- We’ll now explore how this broad Russell index removal interacts with Lumentum’s AI-focused investment narrative and what it could mean for investors.
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Lumentum Holdings Investment Narrative Recap
To own Lumentum, you have to believe that demand for its lasers and optics in AI data centers will keep underpinning growth, and that it can manage customer concentration, capacity ramps, and margin pressure in cloud modules. The broad Russell index removals may add short term volatility or forced selling, but they do not directly change the core AI data center thesis, nor the key risk that a few hyperscale customers still drive a large share of revenue.
Against that backdrop, the multiyear optics and indium phosphide laser commitment with Nvidia, backed by a US$2.0 billion investment, is especially important. It ties Lumentum’s AI story directly to a leading accelerator vendor and supports its push into co packaged optics and high power lasers, which sit at the center of current growth catalysts, even as the stock adjusts to life outside the Russell benchmarks.
Yet despite this AI momentum, investors should be aware that heavy reliance on a handful of hyperscale buyers could quickly become a problem if...
Read the full narrative on Lumentum Holdings (it's free!)
Lumentum Holdings' narrative projects $11.8 billion revenue and $4.2 billion earnings by 2029. This requires 67.8% yearly revenue growth and about a $3.8 billion earnings increase from $439.0 million today.
Uncover how Lumentum Holdings' forecasts yield a $1111 fair value, a 57% upside to its current price.
Exploring Other Perspectives
Some of the lowest ranked analysts are far more cautious than the consensus, even before this index removal, despite still projecting around US$7.1 billion of revenue and US$4.3 billion of earnings by 2029. If you are weighing Lumentum’s AI data center promise against the risk that a few big customers pull back, their more pessimistic view is a reminder that expectations can shift and that this latest news might yet reshape both narratives.
Explore 8 other fair value estimates on Lumentum Holdings - why the stock might be worth over 7x more than the current price!
Reach Your Own Conclusion
Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.
- A great starting point for your Lumentum Holdings research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
- Our free Lumentum Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Lumentum Holdings' overall financial health at a glance.
No Opportunity In Lumentum Holdings?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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