In a press release on March 2, 2026, tech giant NVIDIA announced its investment of $2 billion each in photonic product makers Lumentum (LITE) and Coherent (COHR), as part of its drive for a future-proof investment that nurtures faster AI processing in the long run.
The announcement on Monday led to a boom in Lumentum and Coherent shares as they rose 11.7% and 15.4%, respectively. This multi-year strategic agreement with the silicon and photonic pioneers is designed to foster the advancing AI ecosystem, using high-performance optics technologies, including manufacturing, as well as future research and development, to enable next-generation AI infrastructure.
Harnessing the Speed of Light
NVIDIA’s multi-billion-dollar purchase on Monday is a pathway to enhance AI infrastructure and energy efficiency through the advanced laser and optical networking products offered by both Coherent and Lumentum. This deal grants NVIDIA access to facilitate future research and development within this fast-growing field, boosting technological leadership and domestic production within the U.S.
How will this investment impact data center energy efficiency? Photonics employs light (photons), instead of electric signals, to transmit information. Harnessing the speed of light enables ultra-fast data transmission, while also offering massive bandwidth and data density.
Photonic systems are also more energy-efficient and generate less heat, making them ideal for large-scale data centers, undersea cables, and next-generation AI networks, where speed, scalability, and sustainability are paramount. Therefore, investing in photonic research and infrastructure could give a headstart to NVIDIA in the fast-moving AI industry.
NVIDIA Founder and CEO Jensen Huang said, “Computing has fundamentally changed. In the age of AI, software runs on intelligence with tokens generated in real time by AI factories for every interaction and every context. With Coherent, NVIDIA is pioneering next-generation silicon photonics to enable AI infrastructure at unprecedented scale, speed, and energy efficiency.”
Coherent CEO Jim Anderson commented that “This strategic relationship underscores Coherent’s role as a key enabler of next-generation AI data center infrastructure. We are proud to expand our 20-year relationship with NVIDIA by increasing their access to include multiple product families to help them build the AI data centers of the future.”
Why Choose Coherent and Lumentum?
The strategic partnership with Lumentum and Coherent, key suppliers of advanced laser and optical components, ensures NVIDIA a crucial supply chain advantage for the new optical era.
Founded in 1971 and operating in more than 20 countries, Coherent Corp. is the global photonics leader. The company is a key enabler in silicon photonics and industrial lasers, as well as the development of advanced optical circuit switches designed to boost network efficiency and capacity within data centers.
Lumentum is a global leader in optical and photonic technologies, designing and manufacturing advanced lasers, optical modules, and subsystems that facilitate scalable, energy-efficient data center connectivity by converting electrical signals into light for high-speed data transmission.
Analysing Stock Market Growth
The press release has increased optimism among Wall Street investors as NVIDIA’s partnership will help enhance production capacity and development within the field.
Stocks rose following the announcement as NVIDIA shares gained almost 3% at the end of trading on March 2, 2026. At the same time, the quotations of both photonics companies soared, with Lumentum rising 11.7%, while Coherent’s stock jumped 15.4%.
NVIDIA’s $4 billion investment in Coherent and Lumentum is expected to significantly improve data center energy efficiency by accelerating the development and deployment of photonic systems. By moving to light-based data transmission via optical interconnects, data centers can achieve higher bandwidth with lower power consumption, as compared to traditional copper-based systems.
This strategic push ensures that the network fabric keeps pace with AI compute, reducing energy waste across the entire data center stack.
