Prediction: This Will Be the Next Supercycle After AI Memory. 1 Stock to Buy Now Before It Surges Another 100%.
Written by Micah Zimmerman for The Motley Fool -> Lumentum is becoming a strategic supplier to Nvidia's AI ecosystem, backed by a $2 billion investment and a long-term purchase commitment. Lumentum's new North Carolina manufacturing facility positions the company at the center
Lumentum is becoming a strategic supplier to Nvidia's AI ecosystem, backed by a $2 billion investment and a long-term purchase commitment.
Lumentum's new North Carolina manufacturing facility positions the company at the center of the coming optical networking build-out.
Despite gaining more than 1,100% over the past year, Lumentum's biggest growth drivers may still be ahead.
The AI memory supercycle is real and still running. High-bandwidth memory (HBM) became the scarce resource around which the entire AI industry organized. Investors who got there early made a lot of money .
This caused the conversation in AI infrastructure to shift. Power is one constraint. But the issue that engineers are losing sleep over is optical interconnect, the technology that moves data between chips at the speed of light, inside and between servers. As AI models grow larger and more distributed, moving data across copper wires becomes too slow and too power-hungry.
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Silicon photonics is becoming the next critical layer of the AI stack. The silicon photonics market is estimated at $3.6 billion in 2026 and is projected to reach $15.7 billion by 2033 -- a 23.2% compound annual growth rate. Lumentum Holdings (NASDAQ: LITE) is the stock in this market I'd buy right now, before this cycle gets crowded.
In March 2026, Nvidia (NASDAQ: NVDA) invested $2 billion in Lumentum through a private placement of convertible preferred stock and signed a multibillion-dollar purchase commitment for advanced laser components. One month later, Lumentum announced a new 240,000-square-foot manufacturing facility in Greensboro, North Carolina, acquired from semiconductor company Qorvo. The facility will produce indium phosphide (InP)-based optical devices -- the lasers that power next-generation AI transceivers -- with Nvidia confirmed as a customer.
