:max_bytes(150000):strip_icc()/GettyImages-2243756118-a8fa145dda7a4781acf4a2cdb738ea09.jpg "Nvidia Investments Send Coherent and Lumentum Stocks Soaring")
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Key Takeaways
- Nvidia announced $2 billion investments in both Coherent and Lumentum, news that sent their shares higher.
- Nvidia’s deals include multibillion-dollar purchase commitments for advanced laser and optical products.
New deals with Nvidia are giving two stocks a big boost on Monday.
Shares of photonics and laser makers Coherent (COHR) and Lumentum (LITE) were up a respective 14% and 8% in midday trading, after Nvidia (NVDA), the AI chipmaker at the center of the AI boom, announced separate partnerships.
Nvidia said its deal with Saxonburg, Pa.-based Coherent includes “a multibillion-dollar purchase commitment and future access and capacity rights for advanced laser and optical networking products,” as well as a $2 billion investment in Coherent.
Why This Matters
Nvidia’s deals highlight how the company plans to get around the AI supply chain bottleneck created by demand for advanced lasers and optical networking gear. The company’s multibillion-dollar purchase commitments and direct investment in its suppliers will help Nvidia secure future capacity.
Nvidia also will invest $2 billion in Lumentum and made a multibillion-dollar purchase commitment to the San Jose, Calif.-based firm for “future capacity access rights for advanced laser components.”
Lumentum shares have doubled since the start of the year, while Coherent stock has risen 60%.
Shares of Nvidia, the world’s most valuable company with a market capitalization of $4.4 trillion, were up 3% Monday, but are still down for the year, despite blockbuster quarterly results released last week. CEO Jensen Huang believes investors are underestimating Nvidia but that they’ll change their tone eventually. “The market can’t hold us back forever,” he said.
