Lumentum Holdings will join the NASDAQ-100 Index on May 18, replacing CoStar Group due to its lower market capitalization. The announcement on May 8 led to a 5.39% increase in Lumentum's pre-market trading. The company's stock has surged over 1,200% since early 2024, driven by demand for optical components in AI and cloud computing. Lumentum reported $452 million in Q1 2026 revenue, marking an 18% year-over-year increase. The inclusion in the NASDAQ-100 is expected to boost demand for Lumentum shares as index funds adjust their holdings. Analysts predict a potential 10-15% short-term upside due to these inflows. While the inclusion is a positive signal, some analysts caution about potential overvaluation risks.