Three stocks at the heart of the AI infrastructure boom just got their institutional stamp of approval. Lumentum (LITE), Coherent (COHR), and Vertiv (VRT) were announced as additions to the S&P 500 tonight, as part of the quarterly index rebalancing. You can read the official S&P Global announcement here. This is not a routine reshuffling. The simultaneous addition of two photonics companies alongside the dominant data center power infrastructure provider signals something bigger: the AI trade has moved from speculative to structurally embedded in the American economy.
Earlier, we predicted which stocks would join. Prediction markets had Vertiv as close to a lock (with 71% odds to join the S&P 500). However, Lumentum and Coherent were seen as ‘long shots,’ but are both now joining the S&P 500.
What S&P 500 Inclusion Actually Means
Getting added to the S&P 500 is not just a badge of honor. It is a structural buying event. Over $7 trillion is benchmarked to the S&P 500, meaning every passive index fund and ETF tracking the index is now required to purchase shares of LITE, COHR, and VRT ahead of the rebalancing effective date.
That is a wave of forced, price-insensitive buying coming into stocks that have already had extraordinary runs. For long-term holders, it adds a new category of structural buyer to the market.
Lumentum (LITE): The Photonics Rocket Ship
Lumentum makes the lasers, transceivers, and optical components that move data at the speed of light inside AI data centers. Think of it as the plumbing that makes hyperscale AI possible. NVIDIA made a $4 billion investment in Lumentum and Coherent this week.
This week has been rough for Lumentum. Shares are down 25% across the past 5 days after briefly touching a high of $783.80. Yet, if you pull the timeframe back you can see how good the past year has been.
LITE currently trades at $558.44, up 814% over the past year. Year to date, shares are up 51.51%. But, once again, the wrinkle has been the past week’s performance. That pullback could make tonight’s inclusion announcement particularly well-timed for the index funds now obligated to buy.
Lumentum is riding a wave of momentum. Q2 FY2026 revenue came in at $665.5 million, up 65.5% year over year, with non-GAAP operating margins expanding 1,730 basis points to 25.2%. CEO Michael Hurlston framed the opportunity clearly:
“Our results continue to highlight the strength of our roadmaps for both optical components and systems, which make us mission-critical to the world’s AI leaders.”
Hurlston, Lumentum CEO
There’s little doubt optics demand will boom in the year’s to come, but Lumentum’s valuation is stretched. Shares are up about 1.4% after-hours following the announcement. Lumentum’s share price dropped 14% today amidst a broad AI sell-off that accelerated into the close.
Coherent (COHR): Photonics Goes Mainstream
Coherent is Lumentum’s closest peer in the photonics space and a fellow beneficiary of the NVIDIA investment. Its silicon carbide materials, optical networking products, and datacenter interconnects are the kind of unsexy infrastructure that makes the AI economy run.
COHR trades at $235.88 today, up 262.67% over the past year. YTD the stock is up 27.80%, and up 11.79% over the past month. Like Lumentum, it pulled back this week, falling 15%, giving index funds a slightly better entry point than they would have had a week ago.
The datacenter business is the engine. Coherent’s Datacenter and Communications segment generated $1.208 billion in revenue last quarter, up 34% year over year, and now represents 72% of total company revenue. CEO Jim Anderson has been consistent in his forward outlook:
“We expect continued strong growth in the second-half of fiscal 2026 and throughout fiscal 2027 based on strong datacenter and communications demand and our continued production capacity expansion.”
Jim Anderson, Coherent CEO
Coherent’s inclusion is a statement that photonics is no longer a niche. It is core infrastructure. Shares are little moved so far after hours, up just .12%.
Vertiv (VRT): The Unsung Hero Gets Its Moment
Vertiv builds the power management systems, cooling infrastructure, and thermal management solutions that keep data centers running. Every AI cluster, every GPU rack, every hyperscale facility needs Vertiv’s products to function. It is the only gas station for 50 miles, and the AI buildout is a very long road.
VRT trades at $241.84, up 195.20% over the past year. The stock is up 49.27% year to date and up 32.47% over the past month. On prediction markets, Vertiv was the overwhelming favorite for S&P 500 inclusion. The market knew.
The business momentum is exceptional. Q4 2025 organic orders grew 252% year over year, the strongest order quarter in company history. The backlog now stands at $15.0 billion, up 109% year over year, with a book-to-bill ratio of approximately 2.9x. CEO Giordano Albertazzi put it plainly:
“Our record backlog provides clear visibility into what we expect to be another year of significant growth.”
Giordano Albertazzi, Vertiv CEO
For full year 2026, Vertiv is guiding for net sales of $13.25 billion to $13.75 billion and adjusted EPS of $5.97 to $6.07, representing 42% to 45% earnings growth. That is not a speculative story. That is a backlog-backed growth machine.
Vertiv shares have jumped the most after hours, up about 5%.
The Bigger Picture
Tonight’s rebalancing, which also includes the simultaneous S&P 100 additions of MU, LRCX, AMAT, and GEV, represents one of the most AI-concentrated index reshuffles in history. Adding two photonics companies and a data center power infrastructure leader to the S&P 500 in a single rebalancing is a defining moment. It reflects how broadly the AI trade has expanded beyond the obvious chip names, and how deeply embedded AI infrastructure has become in the fabric of the US economy.