Beyond Intelligence: The Nervous System of the AI Revolution
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 18 2026
0mins
Should l Buy LITE?
Source: Marketbeat
Investment in AI Infrastructure: The conversation around AI investment is shifting towards the physical technology layer, emphasizing the need for high-speed optical networking to support advanced AI systems and their growing demands.
Lumen Technologies' Role: Lumen Technologies has positioned itself as a key beneficiary of the optical upgrade, securing long-term supply agreements for high-speed laser components essential for AI infrastructure, which is projected to see significant revenue growth.
Nokia's Strategic Pivot: Nokia is leveraging its extensive networking expertise to build comprehensive AI systems, focusing on integrated contracts with hyperscale cloud providers to meet the increasing demand for AI infrastructure.
Market Recognition and Growth: Both Lumen and Nokia are experiencing substantial growth, with Lumen reporting a 65.5% year-over-year revenue increase, while Nokia's optical networking division is expanding rapidly, indicating a strong market recognition of their capabilities in AI infrastructure.
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Analyst Views on LITE
Wall Street analysts forecast LITE stock price to fall
14 Analyst Rating
9 Buy
5 Hold
0 Sell
Moderate Buy
Current: 702.730
Low
147.00
Averages
303.36
High
470.00
Current: 702.730
Low
147.00
Averages
303.36
High
470.00
About LITE
Lumentum Holdings Inc. is a designer and manufacturer of optical and photonic products enabling optical networking and laser applications worldwide. Its segments include Cloud & Networking and Industrial Tech. The Cloud & Networking segment products include a comprehensive portfolio of optical and photonic components, modules, and subsystems supplied to cloud and communications network operators and network equipment manufacturers building cloud data center infrastructure, including products for artificial intelligence and machine learning (AI/ML) and data center interconnect (DCI) applications, and communications service provider networks, including products for access (local), metro (intracity), long-haul (city-to-city and worldwide), and submarine (undersea) network infrastructure. The Industrial Tech segment products include solid-state lasers, kilowatt-class fiber lasers, diode lasers, ultrafast lasers, and gas lasers, which address applications in numerous end-markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- EchoStar's Growth Potential: EchoStar's stock has skyrocketed 360% over the past 52 weeks, although it has only risen 13% this year; its position in the communication services sector allows it to benefit from the S&P 500's influence, attracting more investor attention.
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- Customer Collaboration: The facility will serve Nvidia, further solidifying Lumentum's market position in the AI sector and addressing the increasing demand for lasers in this rapidly evolving field.
- Investment and Jobs: Lumentum intends to invest hundreds of millions of dollars over the next several years to scale production and enhance advanced manufacturing capabilities, while preserving and creating over 400 U.S. manufacturing jobs, demonstrating its commitment to American manufacturing.
- Strategic Importance: CEO Michael Hurlston stated that the establishment of this new facility will significantly expand the company's production capacity, deepen strategic partnerships, and ensure the delivery of performance, reliability, and scale required for the AI revolution, marking a pivotal role in the future of computing infrastructure.
See More
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Market Capitalization Requirements: To be eligible for inclusion in the S&P 500, companies must have a market capitalization of at least $22.7 billion, with those falling below this threshold typically facing removal.
Performance of New Additions: The newly added stocks, including EchoStar, have shown impressive performance, with some companies experiencing substantial stock price increases over the past year, indicating strong market interest.
Future Outlook: The article highlights the importance of optical networking in data center infrastructure, with companies like Lumentum and Coherent positioned as leaders in this space, supported by significant investments from NVIDIA to enhance research and manufacturing capabilities.
See More
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- Inflationary Pressure: The high oil prices are likely to drive overall inflation, prompting the Federal Reserve to reconsider its interest rate policies, which has led to a widespread market decline as investors react to potential rate hikes.
- Supply Chain Disruption: Currently, about 20% of oil supply is disrupted due to the largest supply shock in history, raising fears about future supply constraints and potentially leading to further increases in energy costs that could impact profitability across various sectors.
- Hims & Hers Partnership: Hims & Hers has unexpectedly partnered with Novo Nordisk, resolving a legal dispute and allowing the company to sell FDA-approved weight loss drugs directly, which is expected to significantly enhance its business model and boost market confidence.
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- Supply Disruption Impact: Approximately 20% of oil supply has been disrupted for about nine days due to the largest supply disruption in history, with no spare capacity available to alleviate the situation, intensifying fears of sustained high oil prices.
- S&P 500 Changes: The S&P 500 index has undergone changes, removing four companies including Match Group, while adding four others like Vertiv, reflecting strong demand for AI and connectivity infrastructure and indicating a shift in industry trends.
- Hims & Hers Stock Surge: Hims & Hers stock jumped significantly following an unexpected partnership with Novo Nordisk, resolving a legal dispute and allowing the sale of FDA-approved weight loss drugs, which is expected to boost revenue and improve market sentiment.
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