Lumentum's Design Wins Propel Stock Price Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy LITE?
Source: seekingalpha
- Design Wins Propel Stock: Lumentum's recent design wins for 100G and 200G EML chipsets in 800G and 1.6T optical modules could push its stock price above $1,000 per share, indicating strong market confidence in its future growth.
- Earnings Forecast Upgrade: BNP Paribas analysts project Lumentum to achieve over $30 in annualized EPS by the end of 2028, driven by new design wins in its laser portfolio, particularly with 400mW ultra-high-powered lasers used in collaboration with Nvidia.
- Sales Target Enhancement: Lumentum anticipates exceeding $8 billion in annualized sales with a target operating margin of around 40%, bolstered by the upcoming operational capacity of its newly acquired Greensboro fab in early 2028.
- Significant EPS Increase: BNP Paribas raised its 2027 EPS estimate from $19.40 to $25.89 and increased the 2028 estimate to $38.95, reflecting an optimistic outlook on the company's future performance.
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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: 706.350
Low
147.00
Averages
303.36
High
470.00
Current: 706.350
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.
Lumentum's Design Wins Propel Stock Price Expectations
- Design Wins Propel Stock: Lumentum's recent design wins for 100G and 200G EML chipsets in 800G and 1.6T optical modules could push its stock price above $1,000 per share, indicating strong market confidence in its future growth.
- Earnings Forecast Upgrade: BNP Paribas analysts project Lumentum to achieve over $30 in annualized EPS by the end of 2028, driven by new design wins in its laser portfolio, particularly with 400mW ultra-high-powered lasers used in collaboration with Nvidia.
- Sales Target Enhancement: Lumentum anticipates exceeding $8 billion in annualized sales with a target operating margin of around 40%, bolstered by the upcoming operational capacity of its newly acquired Greensboro fab in early 2028.
- Significant EPS Increase: BNP Paribas raised its 2027 EPS estimate from $19.40 to $25.89 and increased the 2028 estimate to $38.95, reflecting an optimistic outlook on the company's future performance.
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- Technological Breakthrough: Tower Semiconductor and partner Coherent have unveiled a new technology that utilizes fiber-optic signals to achieve data transmission speeds of 420 gigabits per second between processors in data centers, marking a significant advancement for AI data center performance.
- Positive Market Reaction: Following the announcement, Tower Semiconductor's stock rose by 4.39%, peaking at an 11% increase early in the day, indicating investor optimism regarding the commercialization prospects of this new technology and reflecting market confidence in its growth potential.
- Enhanced Competitive Position: If successfully commercialized, Tower Semiconductor will join a select group of companies, including Broadcom and Lumentum, capable of supplying high-speed networking solutions for the AI data center industry, thereby strengthening its position in this rapidly evolving market.
- Cautious Investor Outlook: Despite the recent stock surge, with a 480% increase since last April and a 56% rise this month, investors should carefully assess the situation, as today's performance may indicate a peak, suggesting a wait for a healthier dip before investing.
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- GE Vernova's Strong Performance: GE Vernova shares increased by 5%, reaching a new 52-week high of nearly $921, as Morgan Stanley raised its price target to $960, indicating that strong AI demand will further enhance its margins.
- Apple's Potential in China: Despite some pessimistic research notes, Bank of America's supply chain checks suggest Apple will launch its first foldable iPhone this year, with expectations of significantly higher demand, highlighting strong market interest in the product.
- Investor Sentiment Shift: Cramer emphasized that investors should not rush to sell during the market bounce, but rather seize opportunities, especially as the S&P Short Range Oscillator indicates the market is oversold.
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Vertiv Stock Enters the S&P 500 Today: Will Its AI Surge Continue?
Company Overview: Vertiv Holdings, a key partner of Nvidia, specializes in data-center infrastructure.
Market Achievement: The company is set to join the S&P 500 following a successful year marked by significant gains.
Investment Consideration: The substantial increase in Vertiv's stock raises questions about its future growth potential.
Industry Context: Vertiv's performance is closely tied to the evolving demands of the data center market and technological advancements.
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AI Infrastructure Companies Undergo Market Revaluation
- Market Revaluation: The S&P 500 index's inclusion of Vertiv, Lumentum, Coherent, and EchoStar signals a shift in investor focus towards AI infrastructure companies, indicating a growing recognition of the physical systems that support AI technologies.
- Investment Dynamics: Nvidia's $2 billion investments in Lumentum and Coherent in early March aim to advance optical technologies essential for future AI systems, highlighting a strong demand for optical infrastructure to meet escalating data transfer needs.
- Performance Outlook: Vertiv forecasts 2026 revenue between $13.25 billion and $13.75 billion, reflecting an organic growth rate of approximately 27% to 29%, compared to analysts' estimates of $12.39 billion, showcasing the company's robust growth potential amid the AI boom.
- Stock Market Performance: Although Vertiv's stock traded 3% lower in premarket on Monday, it has gained 57% year-to-date, demonstrating market recognition of its critical role in heat management and power solutions for AI data centers.
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Stock Movers: Newmont, Super Micro, DraftKings, Albemarle, Synopsys, Lumentum, and Others
- Stock Market Reaction: Stock futures increased on Monday following President Trump's announcement regarding Iran.
- U.S.-Iran Relations: The U.S. will delay strikes on Iran's energy infrastructure for five days to facilitate ongoing peace talks.
See More
Lumentum's Design Wins Propel Stock Price Expectations
- Design Wins Propel Stock: Lumentum's recent design wins for 100G and 200G EML chipsets in 800G and 1.6T optical modules could push its stock price above $1,000 per share, indicating strong market confidence in its future growth.
- Earnings Forecast Upgrade: BNP Paribas analysts project Lumentum to achieve over $30 in annualized EPS by the end of 2028, driven by new design wins in its laser portfolio, particularly with 400mW ultra-high-powered lasers used in collaboration with Nvidia.
- Sales Target Enhancement: Lumentum anticipates exceeding $8 billion in annualized sales with a target operating margin of around 40%, bolstered by the upcoming operational capacity of its newly acquired Greensboro fab in early 2028.
- Significant EPS Increase: BNP Paribas raised its 2027 EPS estimate from $19.40 to $25.89 and increased the 2028 estimate to $38.95, reflecting an optimistic outlook on the company's future performance.
See More
Tower Semiconductor's Tech Breakthrough Boosts Stock Price
- Technological Breakthrough: Tower Semiconductor and partner Coherent have unveiled a new technology that utilizes fiber-optic signals to achieve data transmission speeds of 420 gigabits per second between processors in data centers, marking a significant advancement for AI data center performance.
- Positive Market Reaction: Following the announcement, Tower Semiconductor's stock rose by 4.39%, peaking at an 11% increase early in the day, indicating investor optimism regarding the commercialization prospects of this new technology and reflecting market confidence in its growth potential.
- Enhanced Competitive Position: If successfully commercialized, Tower Semiconductor will join a select group of companies, including Broadcom and Lumentum, capable of supplying high-speed networking solutions for the AI data center industry, thereby strengthening its position in this rapidly evolving market.
- Cautious Investor Outlook: Despite the recent stock surge, with a 480% increase since last April and a 56% rise this month, investors should carefully assess the situation, as today's performance may indicate a peak, suggesting a wait for a healthier dip before investing.
See More
Trump's Productive Talks with Iran Boosts Market Sentiment
- Market Surge: Stocks rose approximately 2% after Trump announced productive discussions with Iran and halted strikes on its energy infrastructure, leading to a 10% drop in international oil prices to $100 per barrel, easing consumer pressure.
- GE Vernova's Strong Performance: GE Vernova shares increased by 5%, reaching a new 52-week high of nearly $921, as Morgan Stanley raised its price target to $960, indicating that strong AI demand will further enhance its margins.
- Apple's Potential in China: Despite some pessimistic research notes, Bank of America's supply chain checks suggest Apple will launch its first foldable iPhone this year, with expectations of significantly higher demand, highlighting strong market interest in the product.
- Investor Sentiment Shift: Cramer emphasized that investors should not rush to sell during the market bounce, but rather seize opportunities, especially as the S&P Short Range Oscillator indicates the market is oversold.
See More
Vertiv Stock Enters the S&P 500 Today: Will Its AI Surge Continue?
Company Overview: Vertiv Holdings, a key partner of Nvidia, specializes in data-center infrastructure.
Market Achievement: The company is set to join the S&P 500 following a successful year marked by significant gains.
Investment Consideration: The substantial increase in Vertiv's stock raises questions about its future growth potential.
Industry Context: Vertiv's performance is closely tied to the evolving demands of the data center market and technological advancements.
See More
AI Infrastructure Companies Undergo Market Revaluation
- Market Revaluation: The S&P 500 index's inclusion of Vertiv, Lumentum, Coherent, and EchoStar signals a shift in investor focus towards AI infrastructure companies, indicating a growing recognition of the physical systems that support AI technologies.
- Investment Dynamics: Nvidia's $2 billion investments in Lumentum and Coherent in early March aim to advance optical technologies essential for future AI systems, highlighting a strong demand for optical infrastructure to meet escalating data transfer needs.
- Performance Outlook: Vertiv forecasts 2026 revenue between $13.25 billion and $13.75 billion, reflecting an organic growth rate of approximately 27% to 29%, compared to analysts' estimates of $12.39 billion, showcasing the company's robust growth potential amid the AI boom.
- Stock Market Performance: Although Vertiv's stock traded 3% lower in premarket on Monday, it has gained 57% year-to-date, demonstrating market recognition of its critical role in heat management and power solutions for AI data centers.
See More
Stock Movers: Newmont, Super Micro, DraftKings, Albemarle, Synopsys, Lumentum, and Others
- Stock Market Reaction: Stock futures increased on Monday following President Trump's announcement regarding Iran.
- U.S.-Iran Relations: The U.S. will delay strikes on Iran's energy infrastructure for five days to facilitate ongoing peace talks.
See More
