Lumentum vs Coherent: How the Two AI Optics Leaders Differ

Summary

Lumentum Holdings and Coherent Corp. have both become major beneficiaries of rising AI data-center optical demand.

The comparison became especially relevant in March 2026, when NVIDIA announced separate $2 billion strategic investments in each company. Both agreements included multibillion-dollar purchase commitments and future capacity rights.

But Lumentum and Coherent are not identical businesses.

Lumentum is the smaller company by revenue and has become highly focused on optical components and systems linked to cloud and AI networking.

Coherent has a broader photonics portfolio spanning materials, devices, modules and systems, with businesses serving both Data Center & Communications and industrial markets.

For LITEON investors, understanding the difference helps place Lumentum's AI-optics exposure in the right competitive context.

Lumentum vs Coherent at a Glance

1. Coherent Is Larger by Revenue

Coherent reported fiscal 2026 revenue of approximately $7.118 billion. Its Data Center & Communications segment generated $5.275 billion, up 40% year over year.

Lumentum reported fiscal 2026 revenue of $3.014 billion, up 83.2%.

So Coherent is currently the larger company by total revenue.

Lumentum, however, grew substantially faster during the latest fiscal year.

2. Coherent Has a Broader Portfolio

Coherent describes a vertically integrated photonics stack spanning:

• materials;
• lasers;
• optical devices;
• transceivers;
• modules;
• complete systems.

Its business also includes a substantial Industrial segment, which generated approximately $1.844 billion in FY2026 revenue.

That gives Coherent broader end-market exposure.

3. Lumentum Is More Concentrated Around Optical Components and Systems

Lumentum reported FY2026:

Components revenue: $2.006B

Systems revenue: $1.008B.

The company's current AI story is closely associated with:

• cloud transceivers;
• high-power lasers;
• optical circuit switching;
• CPO;
• NPO.

This can make LITE particularly sensitive to AI optical-networking expectations.

4. Both Are Critical to the AI Bandwidth Problem

The underlying problem is the same.

AI clusters are becoming too large and bandwidth-intensive for traditional electrical connectivity alone to scale efficiently.

Both companies supply technologies that move more of the data path toward optics.

That includes:

lasers

transceivers

silicon photonics

CPO

higher-speed optical links

5. Coherent Has a Very Broad Technology Stack for CPO

At OFC 2026, Coherent demonstrated CPO technologies based on:

• silicon photonics;
• high-power InP continuous-wave lasers;
• VCSELs;
• 400G-per-lane InP modulators.

It also demonstrated next-generation pluggable technologies spanning 1.6T, 3.2T and emerging 12.8T architectures.

That breadth is one of Coherent's competitive strengths.

6. Lumentum Is Also Positioned Across Multiple Optical Architectures

Lumentum is not dependent on one single connectivity transition.

Its growth roadmap includes:

• 1.6T cloud modules;
• optical circuit switching;
• Near-Packaged Optics;
• Co-Packaged Optics;
• external and ultra-high-power laser technologies.

MEXC's Lumentum AI optical-demand analysis explains these technologies in more depth.

7. NVIDIA Invested Equally in Both Companies

On March 2, NVIDIA announced:

$2B investment in Lumentum

and separately

$2B investment in Coherent.

Both deals included:

• multiyear strategic cooperation;
• multibillion-dollar purchase commitments;
• capacity-access rights;
• U.S. manufacturing expansion.

This is a powerful signal about the overall optical market.

NVIDIA appears to be strengthening multiple suppliers rather than relying on one.

8. Why Would NVIDIA Need Multiple Optical Suppliers?

Several reasons are possible.

Capacity

Future AI systems may need enormous volumes of optical components.

Supply-Chain Resilience

Depending on one supplier can create operational risk.

Different Technologies

Different networking architectures may require different laser, material and module technologies.

Competition

Maintaining multiple suppliers can help encourage innovation, availability and commercial discipline.

9. Growth Profiles Differ

Lumentum's FY2026 revenue grew 83.2%.

Coherent's Data Center & Communications revenue grew 40%.

These numbers should not be compared as identical metrics—one is company-wide revenue growth and the other is segment growth—but they illustrate strong AI-related momentum at both companies.

Coherent's Q4 FY2026 total revenue reached $2.05 billion, up 34% year over year.

10. Margin Profiles Also Differ

Lumentum Q4 FY2026 non-GAAP gross margin reached 50.4%.

Coherent Q4 FY2026 non-GAAP gross margin reached 40.2%.

This does not automatically make one company superior.

Product mix, business breadth and accounting structure differ.

But margins help investors understand how effectively AI demand converts into profit.

Lumentum vs Coherent: Which Has More AI Exposure?

There is no simple percentage that answers this cleanly.

Coherent has a larger Data Center & Communications operation but also a broader industrial business.

Lumentum is smaller and currently experiencing very rapid growth linked to cloud and optical-networking demand.

The choice is therefore partly about concentration versus breadth:

Lumentum: more concentrated exposure to a rapidly accelerating optical-networking story.

Coherent: broader photonics scale and wider end-market diversification.

What This Comparison Means for LITEON

LITEON does not provide exposure to the entire optical industry.

It is specifically linked to Lumentum's LITE stock.

Therefore, buying LITEON is not equivalent to buying:

Lumentum + Coherent

or

an AI optics ETF.

It creates company-specific exposure.

Readers unfamiliar with that distinction can review What Is LITEON?.

Sarah Chen: AI Optics Is Large Enough for More Than One Winner

According to MEXC senior analyst Sarah Chen, NVIDIA's decision to back both companies is important for understanding the market structure.

"The key takeaway is not necessarily that NVIDIA has picked two competing winners. It may be that the optical requirement for future AI infrastructure is too large and technologically diverse to rely on one supplier."

For investors, the distinction lies in exposure.

"Coherent offers greater portfolio breadth. Lumentum currently provides a more concentrated high-growth optical networking story. Neither structure removes execution risk, but they will react differently as AI architectures evolve."

FAQ

Are Lumentum and Coherent competitors?

Yes, they compete in multiple optical and photonics markets, although their portfolios are not identical.

Did NVIDIA invest in both?

Yes. NVIDIA announced separate $2 billion investments in Lumentum and Coherent on March 2, 2026.

Which company is larger?

Coherent reported approximately $7.12 billion of FY2026 revenue compared with Lumentum's $3.01 billion.

Which grew faster recently?

Lumentum's total FY2026 revenue grew 83.2%, while Coherent's FY2026 Data Center & Communications segment grew 40%. The metrics cover different scopes and should not be treated as a direct apples-to-apples comparison.

Does LITEON provide exposure to Coherent?

No. LITEON is linked specifically to Lumentum's LITE stock.

Conclusion

Lumentum and Coherent are both major participants in the AI optical infrastructure cycle, but they offer different exposures.

Coherent is larger and more diversified across the photonics stack.

Lumentum is smaller, more concentrated and currently experiencing exceptional growth from optical networking.

NVIDIA's decision to invest $2 billion in each company reinforces the broader conclusion:

AI infrastructure is becoming an optics story as well as a compute story.

For LITEON investors, the relevant exposure remains specifically Lumentum, which means company-level execution and valuation still matter.