How Lumentum Holdings (LITE) Powers the Next Generation of AI Data Demand

The Parnassus Growth Equity Fund's second-quarter 2026 investor letter highlights Lumentum Holdings Inc. (NASDAQ:LITE) as a key holding in its portfolio. The fund returned 17.49% in the quarter, outperforming the Russell 1000 Growth Index by 0.75%. Over the year-to-date period, Parnassus Growth Equity Fund's Fund returned 6.17%, outpacing the Russell 1000 Growth Index by 0.84%.

Lumentum Holdings Inc. specializes in manufacturing and selling optical and photonic products, which are essential in AI infrastructure. The company's stock gained 6.57% in the past month and has seen a 439.98% increase over the past year. As of September 15, 2026, Lumentum Holdings Inc. closed at $838.96 per share.

The Fund recognizes Lumentum Holdings Inc. as an exposure to a critical bottleneck in AI infrastructure, with optical networking enabling faster and more efficient data transfer. The company's components benefit from strong competitive advantages, such as deep technical expertise and high switching costs once embedded in customer platforms.

Despite its potential, Lumentum Holdings Inc. (NASDAQ:LITE) is not among the top 40 most popular stocks among hedge funds. As of the second quarter, 111 hedge fund portfolios held the stock, a decrease from 123 in the previous quarter. While the fund acknowledges the company's potential, it believes that certain AI stocks offer greater upside potential and carry less downside risk.