Shares in Lumentum Holdings and Coherent Corp rose 8% and 6.5% respectively in premarket trading after Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) said it would invest $2 billion in each company to support research, development and manufacturing in the United States.
Nvidia confirmed on Monday that the $4 billion combined investment will be directed towards photonic product development and expanded US production capacity at the two suppliers.
The two are manufacturers of photonic components used in high-speed data transmission, optical networking and advanced semiconductor applications.
Nvidia did not disclose specific timelines or equity structures associated with the investments.
The funding is intended to support research and development as well as manufacturing operations within the US, aligning with broader efforts to localise advanced technology supply chains.
Photonic products use light rather than electrical signals to transmit data, enabling faster and more energy-efficient communications systems.
Such components are increasingly critical in artificial intelligence data centres, high-performance computing and advanced networking infrastructure, areas where Nvidia has a significant presence.
By backing domestic photonics suppliers, Nvidia is seeking to reinforce capacity in a segment viewed as strategically important for next-generation computing and AI workloads.
The companies did not provide financial forecasts or quantify the expected revenue impact from the investment.