Lumentum's Optical Chips Propel AI Data Transmission
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy LITE?
Source: NASDAQ.COM
- Market Transformation: Lumentum's optical equipment has seen its stock price surge nearly 1,000% over the past 12 months, transforming from a supplier of VSCEL chips for Apple into one of the hottest AI stocks, highlighting its critical role in the AI market.
- Strategic Investment: In March, Lumentum secured a $2 billion investment and strategic partnership from Nvidia, underscoring the importance of its optical technology in data centers and AI applications, further solidifying its market position.
- Revenue Outlook: Although annual revenue declined from $1.7 billion to $1.6 billion between 2022 and 2025, it is projected to surge to $6.4 billion at a 58% CAGR from 2025 to 2028, reflecting strong growth potential driven by AI demand.
- Profitability Improvement: After significant losses in 2023 and 2024, Lumentum achieved a slim profit in 2025, marking the initial success of its shift towards AI optics, with expectations to continue benefiting from the expanding AI market.
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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: 764.650
Low
147.00
Averages
303.36
High
470.00
Current: 764.650
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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