Nvidia Invests $2 Billion in Lumentum for Optical Connectivity

Nvidia invested $2 billion in Lumentum in March 2026 to collaborate on the transition from copper-based to optical fiber connectivity within data centers. This partnership aims to address the increasing demand for high-speed connectivity between GPUs in advanced AI clusters.

Lumentum provides the fiber-optic lasers, modules, and packaging necessary to replace traditional copper connections. Kathy Ta, Lumentum's Vice President of Investor Relations, noted that the total addressable market for optical connections could grow significantly, potentially reaching a 100x multiple in bullish scenarios as connectivity goes fully optical.

Nvidia continues to experience growth driven by hyperscaler spending and the production of its Vera Rubin platform. Some analysts project the company's share price could reach $400 by the end of 2027.