The AI hardware trade, which minted some of the most spectacular stock gains of the past year, is showing signs of exhaustion. Lumentum fell roughly 8% and Coherent dropped approximately 9% on June 23-24, 2026, part of a broader rout across optical and photonics names tied to AI data center buildouts.
Applied Optoelectronics joined the selloff, falling around 13% over the same stretch.
How high they flew
Lumentum shares had climbed over 1,000% in the 12 months before the pullback. That is not a typo.
The engine behind those gains was straightforward: AI data centers need enormous amounts of optical networking components to move data at the speeds modern AI workloads demand. Companies like Lumentum and Coherent supply exactly those components, and investors bid their shares up accordingly.
