Lumentum is a stock from the Growth portfolio that keeps popping up in the feed. Why all the interest?

Servers in data centers need to move massive amounts of data between each other. Copper cables used to be enough. But AI models have gotten so large that copper simply can't keep up anymore.

The solution is to transmit data using light over fiber optics. But to generate and control that light, you need specialized lasers, tiny chips made from rare semiconductor materials like indium phosphide (InP).

There are very few factories in the world that can produce these lasers at scale. InP is a complex technology that requires purpose-built fabs that took years to develop.

Key players:
Lumentum $LITE, the leader with the largest production capacity
Coherent $COHR, another major player making similar products
Applied Optoelectronics $AAOI, smaller but scaling up
Corning $GLW, more focused on fiber optic cable itself (the "pipes," not the lasers)
Ciena $CIEN, Nokia $NOK, optical networking equipment

There simply aren't enough lasers to go around.

Independent analysts estimate the AI data center optics market will grow from $10B to $30-40B by 2030. Lumentum believes the opportunity is even bigger than that.