Lumentum's stock surged 5.23% intraday on Thursday, riding a wave of positive sentiment in the optical networking sector after a closely watched startup landed a massive funding round.

The rally was sparked by news that optical networking startup Lumilens had raised over $700 million in a Series C round, valuing the company at $5.51 billion. Lumilens designs high-speed optical and networking products for AI data centers, and the funding round—co-led by Atreides Management, Bain Capital Ventures, and others—underscored the explosive demand for connectivity technologies amid the AI boom.

Lumilens also disclosed that it has hired executives and engineers from established players including Lumentum, Coherent, and Cisco, highlighting the fierce competition for photonics talent and the industry's rapid expansion. The news reinforced the view that optical networking companies like Lumentum are well-positioned to benefit from the hyperscalers' massive data center buildouts.