The AI data center boom continues to fuel a rally in optical communications stocks. Lumentum (LITE.US) surged 16.52% on Monday, closing at $1,053.09 after hitting a record high intraday. The move followed the announcement of its official inclusion in the Nasdaq 100 Index on May 18, replacing CoStar Group (CSGP.US). This news propelled Lumentum to become the best-performing component of the S&P 500 that day. Year-to-date, Lumentum's stock has soared 186%, with a staggering 1,368% gain over the past 12 months. The market views the company as a continued beneficiary of the AI data center construction wave and the rapid capital expenditure growth from hyperscale cloud providers. However, just days prior, Lumentum's stock had experienced a pullback, declining for two consecutive sessions following its earnings report. The company's Q3 FY2026 results, released last week, showed profits exceeding market expectations and revenue growing 90% year-over-year, yet they still fell short of Wall Street's lofty expectations, leading to an approximately 10% cumulative drop on May 6 and 7. Now, with the Nasdaq 100 inclusion news, the stock has resumed its strong upward trajectory. Lumentum was not alone in its impressive performance; the broader AI optical communications sector also rallied strongly. COHERENT (COHR.US) rose 13.25% on Monday, closing at $379.69, while Corning (GLW.US) gained 11%, closing at $207.39, with both companies also setting new record closing highs. Lumentum, COHERENT, and Corning occupied the top three spots on the S&P 500's gainers list for the day. In contrast, the S&P 500 and the Dow Jones Industrial Average rose only about 0.2%. As AI model training scales continue to expand, the demand for data transmission between AI chips is growing exponentially. The optical communication technologies produced by Lumentum and COHERENT are critical infrastructure for high-speed connectivity between AI servers and GPUs. Similar to Lumentum, COHERENT also faced selling pressure last week following its earnings report but has since rebounded sharply. The stock is up 19% so far in May and has gained 106% year-to-date. Both companies also have backing from NVIDIA (NVDA.US). In March, NVIDIA announced separate $2 billion investments in Lumentum and COHERENT and signed multi-billion-dollar supply agreements with each. Meanwhile, Corning, which produces glass and fiber optic products, is benefiting from the surge in optical communication demand driven by AI. Its optical communications business is now its largest segment. Additionally, on Monday, Bank of America added Corning to its "US 1 List," representing the bank's most favored core investment ideas. Data shows Corning's stock has risen 136% year-to-date and 342% over the past 12 months.