Lumentum Holdings' stock soared 6.54% at the open on Tuesday, marking a significant upward movement for the optical communications company.

The surge comes as Nvidia CEO Jensen Huang's recent emphasis on optical connectivity as critical for AI infrastructure has brought fresh attention to Lumentum's role in AI data center networking. The company is also highlighted as a key player in the emerging Physical AI hardware ecosystem, supplying advanced optics for AI-powered devices like robots, smart glasses, and autonomous vehicles.

Additionally, the stock appears to be experiencing a technical recovery after multiple consecutive sessions of decline left it in oversold territory. Analysts have noted that the recent AI hardware selloff should be viewed as a valuation reset rather than a signal of weakening demand, with Lumentum among stocks whose valuations had been significantly compressed. The broader optical communications sector is showing signs of rebound in tandem.