Tržby Fabrinetu z datových center ve 4. čtvrtletí fiskálního roku 2026 vzrostly meziročně o 68 % na 669 milionů USD a tvořily 51 % celkových tržeb. Firma čeká další růst díky novým transceiverům a rozšiřování kapacit.
Key Takeaways Fabrinet's data-center revenues surged 68% to $669M, reaching 51% of total quarterly revenues.FN sees fiscal 2027 growth supported by new transceiver ramps and expanded manufacturing capacity.Fabrinet views OCS as a growth opportunity as optical switching adoption expands across AI clusters. Fabrinet (FN - Free Report) is benefiting from accelerating demand for high-speed optical connectivity as hyperscalers expand artificial intelligence (AI) and cloud data-center infrastructure. The company manufactures optical and interconnect products used in data-center networking, data-center interconnect (“DCI”), high-performance computing (“HPC”) and other AI infrastructure applications. Strong demand across these areas is strengthening Fabrinet’s position in optical networking and expanding its opportunity against Lumentum Holdings (LITE - Free Report) and Applied Optoelectronics (AAOI - Free Report) , both of which are benefiting from rising bandwidth requirements across AI data centers.
Fabrinet’s data-center business has become its largest revenue category. In the fourth quarter of fiscal 2026, data-center revenues surged 68% year over year and 13% sequentially to $669 million, accounting for 51% of total revenues. DCI was the largest contributor to growth, with its annualized revenue run rate exceeding $1 billion, while HPC also made a substantial contribution. Fabrinet serves essentially all major DCI players and continues to see strong demand across DCI, transceivers and HPC. Customer forecasts provide visibility through the end of 2027 and beyond, although these forecasts are not firm orders.
The company is expanding its exposure to high-speed transceivers through hyperscaler-direct and merchant programs. New program ramps are expected to continue through fiscal 2027, adding to growth from existing customers. Fabrinet has delivered 12 consecutive quarters of record revenues and six consecutive quarters of accelerating year-over-year growth. Management indicated that, based on current demand trends, another year of accelerating growth in fiscal 2027 is possible.
Manufacturing expansion should strengthen Fabrinet’s ability to capture AI infrastructure demand. Building 10 in Chonburi, which is expected to be completed in the first quarter of fiscal 2027, is expected to add roughly $3-$3.5 billion of revenue capacity, potentially lifting total capacity to $8.5-$9.3 billion. Capacity from Nava Nakorn, the new Santa Clara campus and two additional Chonburi facilities could eventually increase Fabrinet’s potential revenue capacity to $12.5-$14 billion over the coming years. Optical cross-connect (OCS) represents another potential growth opportunity. Fabrinet believes OCS fits well with its existing manufacturing capabilities because the technology is similar to products it already produces, potentially giving the company an early advantage as optical switching adoption expands in AI clusters.
FN Faces Tough CompetitionLumentum Holdings is strengthening its AI data-center position through cloud transceivers, pump lasers, electro-absorption-modulated lasers, continuous-wave lasers, OCS and emerging near-packaged optics/co-packaged optics solutions. Its systems revenues jumped 123% year over year and 30% sequentially to $357 million in the fourth quarter of fiscal 2026, driven by cloud transceivers and OCS. LITE began shipping 1.6T transceivers and expects adoption to intensify through calendar 2027. Pump-laser shipments surged more than 80% year over year and Lumentum expects shipments to increase fourfold over the next several quarters amid strong AI training and inference demand.
Applied Optoelectronics is expanding its AI data-center exposure through 400G, 800G and 1.6T transceivers. In the second quarter of 2026, data-center revenues surged 140.4% year over year to $107.7 million, while 800G revenues increased more than tenfold year over year. The company has more than $200 million of 1.6T orders in hand and expects more than $70 million of 1.6T revenues in fourth-quarter of 2026. Customer demand remains above available capacity, while AAOI expects monthly 800G and 1.6T production capacity to exceed 650,000 units by year-end 2026 and 930,000 units by 2027-end. Its vertically integrated laser manufacturing and expanding U.S. footprint further intensify competition for AI optical demand.
FN’s Share Price Performance, Valuation & EstimatesShares of Fabrinet have plunged 10.5% year to date, underperforming the broader Zacks Computer and Technology sector’s 18.2% growth.
FN Stock’s Price Performance
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FN stock is trading at a premium, with forward 12-month price/earnings of 21.14X compared with the broader sector’s 20.74X. Fabrinet has a Value Score of C.
FN’s Valuation
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The Zacks Consensus Estimate for Fabrinet’s earnings is currently pegged at $4.19 per share, up by 17 cents over the past 30 days, suggesting 43.49% growth.
Fabrinet currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lumentum začal ve 4. čtvrtletí fiskálního roku 2026 dodávat 1.6T transceivery a očekává rychlejší adopci v AI sítích. Firma zároveň čelí konkurenci od Cisco a NVIDIA.
Key Takeaways Lumentum began shipping 1.6T transceivers in Q4 FY26, with adoption set to accelerate.Higher-ASP 1.6T products, better yields and capacity utilization are boosting transceiver profitability.LITE expects 200G EMLs to reach at least 50% of volume by mid-2027 as AI optics demand rises. Lumentum (LITE - Free Report) is benefiting from the accelerating transition toward 1.6T transceivers and 200G-per-lane optical technology as hyperscalers deploy increasingly bandwidth-intensive artificial intelligence (AI) clusters. The company began shipping 1.6T transceivers in the fourth quarter of fiscal 2026, while the bulk of its cloud transceiver shipments remained at 800G and expects adoption to intensify from the first quarter of fiscal 2027 through calendar 2027. Lumentum believes improved design engineering has helped it reach the market ahead of larger competitors in several instances, strengthening its position against Cisco Systems (CSCO - Free Report) and NVIDIA (NVDA - Free Report) in next-generation AI connectivity.
The transition should strengthen Lumentum’s Systems business through rising demand for higher-value cloud transceivers. Tier-1 hyperscalers are rapidly shifting from 800G to 1.6T as custom AI clusters require greater bandwidth and more complex signal-integrity requirements. Higher-ASP 1.6T products, improving manufacturing yields and greater capacity utilization, are already supporting transceiver profitability. Lumentum expects continued momentum in its Systems business in the first quarter of fiscal 2027, supported by the 1.6T ramp and accelerating Optical Circuit Switching (OCS) deliveries, although management expects approximately half of sequential first-quarter revenue growth to come from the Components portfolio.
The 1.6T transition is expanding opportunities for Lumentum’s laser portfolio. The company’s 200G-per-lane Electro-absorption Modulated Laser (EML) products already accounted for more than 25% of EML revenues. Lumentum expects 200G EMLs to represent 50% or more of the volume by mid-2027. It expects the product mix to increasingly favor CW lasers as 1.6T adoption rises. LITE’s redesigned 200G CW laser is smaller and more efficient, supporting its gross-margin profile. Both CW and EML products remain accretive to corporate margins, while tighter manufacturing specifications have enabled customers to achieve better transceiver yields.
To capture rising demand, Lumentum is expanding capacity across its two indium-phosphide wafer fabs in Japan and qualifying EML and CW processes on new tools. The company expects more than 50% year-over-year EML unit growth in the December 2026 quarter and is preparing for both 200G and emerging 300G lane-speed opportunities. However, supply remains tight, with component constraints limiting shipments to a level below market demand. Capacity expansion will therefore be critical to translating strong 1.6T and 200G demand into sustained revenues and market-share gains.
LITE Faces Tough CompetitionCisco is strengthening its competitive position through Acacia optics and Silicon One-based AI networking. Acacia generated more than $1 billion in fiscal fourth-quarter orders, while optics represented roughly 40% of Cisco’s $4 billion hyperscale AI infrastructure orders. Cisco also estimates AI scale-across traffic could be roughly 14 times historical data-center interconnect traffic and has already secured P200 scale-across wins with three hyperscalers. Its combination of optics, Silicon One and multi-rail optical systems could pressure Lumentum as AI networks migrate toward higher-speed architectures.
NVIDIA’s expanding presence across hyperscale AI infrastructure positions it to influence next-generation networking architectures. A key competitive strength is its vertically integrated AI platform, combining GPUs, CPUs, NVLink, Spectrum-X, InfiniBand and software. NVIDIA’s Data Center networking revenue nearly tripled year over year to $15 billion, while Spectrum-X has emerged as a major AI-focused Ethernet platform. This growing ecosystem could create competitive pressure for Lumentum by giving NVIDIA greater influence over networking architectures and connectivity choices as AI infrastructure scales.
LITE’s Share Price Performance, Valuation & EstimatesShares of Lumentum have appreciated 125.3% year to date, outperforming the broader Zacks Computer and Technology sector’s rise of 14.4%.
LITE Stock’s YTD Price Performance
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LITE stock is trading at a premium, with a forward 12-month price-to-earnings ratio of 35.94X compared with the broader sector’s 20.66X. Lumentum has a Value Score of F.
LITE’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lumentum’s earnings is currently pegged at $4.23 per share, up by 67 cents over the past 30 days, suggesting 284.55% year-over-year growth.
Lumentum stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lumentum Just Delivered the AI Growth Investors WantedLumentum NASDAQ: LITE CEO Michael Hurlston said the growing bandwidth requirements of artificial intelligence data centers are accelerating a shift from copper connections to optical technologies, creating new demand across racks, clusters and data centers.
Speaking at Deutsche Bank’s 20th Annual Tech Conference, Hurlston said copper’s effective reach declines as connection speeds rise. At 800G, he said, copper can reliably carry signals for roughly 10 meters, while at 1.6T its reliable range falls to approximately two to three meters. Many links within data-center racks and clusters exceed those distances, he said.
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AI Cold War Catches Light: Federal Friction in the Server Rack“As these speeds go up, you go from 800G to 1.6T, eventually we are going to go to 3.2T, the presence of copper and the technical aspects of copper become more and more difficult to make work,” Hurlston said.
Optical Switching Opportunity Expands Hurlston highlighted optical circuit switches, or OCS, as a major growth opportunity. He said customer engagement for OCS is broad and extends beyond Google, despite investor perceptions that Google is the principal user of the technology.
3 Photonics Companies Making Quantum Tech PossibleOCS can be deployed inside a rack to route traffic around overloaded or failed graphics processing units and tensor processing units, Hurlston said. He noted that hardware failures can be especially problematic when large compute models involve tens of millions of dollars in compute time.
The company’s largest customer has substantially increased orders since Lumentum’s most recent earnings call, according to Hurlston. He said stronger OCS demand and the product’s margin profile supported Lumentum’s updated fiscal 2028 earnings-power target of $40.
Lumentum had previously cited an $8 billion total addressable market for OCS, but Hurlston said that estimate now appears “significantly under called.” He attributed expanding interest to OCS’s power and loss advantages relative to electrical switches.
“We think this will be one of the largest growth drivers in the company,” Hurlston said.
Scale-Up, Scale-Across and Optical Engines Hurlston said co-packaged optics, or CPO, and near-packaged optics, or NPO, represent the company’s largest near-term opportunities. He argued the technologies should not be viewed as mutually exclusive or as a threat to the broader optics industry.
In CPO designs, the optical engine is placed on the same substrate as core computing hardware, such as a switch or GPU. NPO places the optical engine separately from the principal compute or switch substrate. Hurlston said NPO is currently expected to represent a larger opportunity than CPO in the near term because some customers are adopting optical lanes at a higher rate.
Lumentum sees opportunities to supply high-powered lasers and external light sources, or ELS, to these architectures. In some configurations, lasers are separated from the optical engine and placed on the faceplate of a tray, he said. For certain NPO customers, Lumentum expects to supply the complete ELS.
Hurlston also said the company’s scale-across business—connecting separate data centers through fiber—is underappreciated. Training models can exceed the capacity of a single data center, requiring multiple facilities to operate together, he said. In addition, community resistance to large data-center projects may encourage operators to build smaller facilities dispersed over several kilometers, increasing the need for fiber connectivity among them.
Laser Demand and Manufacturing Capacity On laser products, Hurlston said average selling prices for electro-absorption modulated lasers, or EMLs, roughly double in the transition from 100G to 200G. He said Lumentum and Broadcom are currently the two large suppliers of 200G EMLs, with limited competitive pressure visible in the near term.
While the number of EMLs is expected to rise as the market transitions from 800G to 1.6T, Hurlston said EML-based transceivers could decline as a percentage of the market as silicon photonics gains adoption. He estimated EML-based transceivers account for roughly 70% to 80% of the 800G market and could represent about 40% to 50% at 1.6T. At 3.2T, he said, silicon photonics may face technical limitations that could increase both EML unit volumes and market share.
Hurlston said laser quality and consistency can improve transceiver yields for customers, supporting a price premium. He added that Chinese suppliers may eventually compete in lower-power continuous-wave laser markets, particularly 70-milliwatt and 100-milliwatt products, but said Lumentum currently sees a supply gap it is being asked to fill.
The company is preparing manufacturing capacity to address demand. Hurlston said Lumentum’s Greensboro facility is expected to begin generating revenue in early calendar 2028 after a roughly two-year production ramp. NVIDIA has entered a multibillion-dollar long-term agreement with Lumentum and helped support the fab purchase and equipment investment, he said.
However, Hurlston said NPO demand has arrived earlier and at a larger scale than the company previously expected. Rather than becoming a late-2028 or early-2029 event, he said the opportunity now appears to be emerging in late 2027 and early 2028.
He identified time as the primary constraint on expanding supply, citing lengthy cycles for installing equipment, qualifying products internally and securing customer qualification. Lumentum is also managing constraints involving reactors, e-beam lithography tools and indium phosphide substrates.
Cloud Light Progress and Industry Risks Hurlston said Lumentum’s Cloud Light module business has improved after earlier quality and time-to-market challenges. Following the acquisition of Cloud Light, quarterly revenue fell below $50 million because of quality issues, he said. The business has since improved quality and engineering execution, and is now running at more than $200 million in quarterly revenue.
The company has begun shipping 1.6T modules and is ahead of competitors on certain stock-keeping units, according to Hurlston. He said the next priority is improving gross margins in the module business.
On geopolitical risks, Hurlston said Lumentum could be a net beneficiary if the U.S. restricts Chinese transceiver suppliers, but cautioned that Chinese companies account for 70% of transceivers in the U.S. market. A sudden loss of that supply could disrupt hyperscalers and would require a measured policy approach, he said.
Looking ahead, Hurlston said investors should watch for optical connectivity moving beyond backplanes and into trays, where it could connect GPUs and memory. “Does this thing really take hold?” he said. “Are you going to see optics actually go in tray and serve this high bandwidth connectivity between memory and between GPUs?”
About Lumentum (NASDAQ:LITE)Lumentum Holdings Inc, headquartered in San Jose, California, is a leading provider of photonic technologies that enable high-speed optical communication networks and advanced industrial applications. The company designs and manufactures a broad range of lasers, optical modules and subsystems tailored to the evolving requirements of telecommunications carriers, cloud data centers and enterprise networking.
Its core product portfolio includes tunable and fixed-wavelength laser transmitters, coherent optical engines, transceivers for long-haul, metro and data center interconnects, as well as test and measurement instruments.
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Bluefin Capital Management koupila v Lumentum Holdings novou pozici za zhruba 934 000 USD, když ve druhém čtvrtletí nabyla 1 089 akcií. LITE zároveň klesl o 6,4 %.
Bluefin Capital Management LLC purchased a new position in shares of Lumentum Holdings Inc. (NASDAQ:LITE – Free Report) during the second quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor purchased 1,089 shares of the technology company’s stock, valued at approximately $934,000.
Other institutional investors and hedge funds also recently added to or reduced their stakes in the company. Advisors Asset Management Inc. grew its position in shares of Lumentum by 36.8% during the 1st quarter. Advisors Asset Management Inc. now owns 945 shares of the technology company’s stock valued at $59,000 after acquiring an additional 254 shares during the period. NewEdge Advisors LLC raised its holdings in Lumentum by 109.9% in the 1st quarter. NewEdge Advisors LLC now owns 11,986 shares of the technology company’s stock worth $747,000 after purchasing an additional 6,275 shares during the period. Empowered Funds LLC boosted its position in Lumentum by 9.1% during the first quarter. Empowered Funds LLC now owns 8,139 shares of the technology company’s stock worth $507,000 after purchasing an additional 680 shares in the last quarter. Hsbc Holdings PLC purchased a new position in Lumentum during the second quarter worth approximately $298,000. Finally, Arrowstreet Capital Limited Partnership acquired a new stake in Lumentum in the second quarter valued at approximately $1,712,000. Hedge funds and other institutional investors own 94.05% of the company’s stock.
Lumentum Trading Down 6.4% Shares of LITE opened at $895.00 on Friday. Lumentum Holdings Inc. has a 52-week low of $125.00 and a 52-week high of $1,085.68. The company has a quick ratio of 1.40, a current ratio of 1.68 and a debt-to-equity ratio of 0.01. The firm’s fifty day moving average is $811.83 and its two-hundred day moving average is $805.08. The stock has a market cap of $80.28 billion, a PE ratio of -10.89 and a beta of 1.50.
Lumentum (NASDAQ:LITE – Get Free Report) last issued its earnings results on Tuesday, August 11th. The technology company reported $3.23 EPS for the quarter, beating analysts’ consensus estimates of $2.97 by $0.26. The business had revenue of $1.01 billion during the quarter, compared to analysts’ expectations of $987.70 million. Lumentum had a negative net margin of 230.15% and a positive return on equity of 26.34%. The company’s quarterly revenue was up 109.3% compared to the same quarter last year. During the same period in the prior year, the business earned $0.88 earnings per share. Lumentum has set its Q1 2027 guidance at 4.050-4.350 EPS. Research analysts forecast that Lumentum Holdings Inc. will post 19.76 earnings per share for the current fiscal year. Key Headlines Impacting Lumentum Here are the key news stories impacting Lumentum this week:
Positive Sentiment: AI infrastructure demand remains the core bullish driver. Lumentum supplies optical components used in high-speed data-center networks, and investors continue to view its 1.6T transceivers and 200G lasers as beneficiaries of accelerating AI-networking demand. Positive Sentiment: Recent operating results provide support. Lumentum’s latest quarter exceeded expectations, with $3.23 in adjusted earnings per share versus a $2.97 consensus estimate and revenue of $1.01 billion, up 109.3% year over year. Q1 fiscal 2027 EPS guidance of $4.05–$4.35 also remains encouraging. Neutral Sentiment: Management’s technology-conference appearance offered no clearly new catalyst. Lumentum presented at the Deutsche Bank 2026 Technology Conference, where investors focused on its AI-product outlook, capacity expansion and execution. The supplied transcript did not identify a specific new forecast or announcement. Lumentum Deutsche Bank Technology Conference Transcript Negative Sentiment: Sector-wide risk-off trading pressured the stock. Applied Optoelectronics and Lumentum reportedly fell about 6%, while Coherent declined about 5%, as the optics stocks that led the August rally pulled back together. A Barron’s report suggested the declines reflected peer-related sympathy selling rather than company-specific news. Optics Stocks Slide as AI Hardware Trade Cools Negative Sentiment: Several insiders sold shares. SVP Jae Kim sold 12,000 shares for approximately $10.2 million, while Vincent Retort sold 38,663 shares for about $33.0 million. CEO Michael Hurlston sold 548 shares for roughly $525,000. The transactions were conducted under pre-arranged Rule 10b5-1 plans, limiting their value as a discretionary bearish signal, but they add a modest overhang after the stock’s substantial rally. SEC CEO Insider Trading Filing Negative Sentiment: Valuation and competition heighten volatility. With LITE trading near its 52-week high, investors may be particularly sensitive to profit-taking, execution problems or competition from Cisco and NVIDIA in AI connectivity. Insiders Place Their Bets In other news, CEO Michael E. Hurlston sold 548 shares of the business’s stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $958.66, for a total transaction of $525,345.68. Following the transaction, the chief executive officer directly owned 186,951 shares in the company, valued at $179,222,445.66. The trade was a 0.29% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, SVP Jae Kim sold 12,000 shares of the stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $852.58, for a total value of $10,230,960.00. Following the completion of the sale, the senior vice president directly owned 37,804 shares of the company’s stock, valued at approximately $32,230,934.32. This represents a 24.09% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 64,563 shares of company stock worth $55,448,750. 0.43% of the stock is currently owned by insiders.
Wall Street Analyst Weigh In LITE has been the subject of a number of recent analyst reports. Needham & Company LLC restated a “buy” rating and issued a $1,040.00 price objective on shares of Lumentum in a research report on Wednesday, August 12th. Bank of America dropped their price target on shares of Lumentum from $1,100.00 to $1,000.00 and set a “neutral” rating on the stock in a research note on Wednesday, August 12th. Rosenblatt Securities reissued a “buy” rating and issued a $1,300.00 price target on shares of Lumentum in a report on Wednesday, August 12th. Raymond James Financial restated an “outperform” rating and set a $1,036.00 price objective on shares of Lumentum in a research report on Wednesday, August 12th. Finally, Loop Capital boosted their target price on shares of Lumentum from $900.00 to $1,400.00 and gave the stock a “buy” rating in a research note on Tuesday, May 5th. One equities research analyst has rated the stock with a Strong Buy rating, thirteen have issued a Buy rating, five have issued a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, Lumentum presently has an average rating of “Moderate Buy” and a consensus price target of $1,044.67.
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Lumentum Company Profile (Free Report)
Lumentum Holdings Inc, headquartered in San Jose, California, is a leading provider of photonic technologies that enable high-speed optical communication networks and advanced industrial applications. The company designs and manufactures a broad range of lasers, optical modules and subsystems tailored to the evolving requirements of telecommunications carriers, cloud data centers and enterprise networking.
Its core product portfolio includes tunable and fixed-wavelength laser transmitters, coherent optical engines, transceivers for long-haul, metro and data center interconnects, as well as test and measurement instruments.
Further Reading Five stocks we like better than Lumentum From SaaS-pocalypse to Perfect Storm: Workday’s AI Growth Story Strengthens These 3 GARP Stocks Show Why Growth and Value Do Not Have to Clash Venture Into High-Volatility Corners of the Market With These 3 ETFs 3 Retail Stocks to Watch After a Big Consumer Earnings Week Want to see what other hedge funds are holding LITE? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Lumentum Holdings Inc. (NASDAQ:LITE – Free Report).
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Lumentum ve 4. čtvrtletí fiskálního roku 2026 zvýšil tržby o 109 % na 1,01 miliardy USD díky silné poptávce po optických propojeních pro datová centra s AI. AAOI dál brzdí kapacitní a dodavatelská omezení.
Key Takeaways Lumentum's revenues surged 109% as AI workloads drove demand for faster optical data-center links. AAOI's growth is strong, but capacity and supply constraints are limiting its ability to meet demand. Lumentum's 2026 earnings estimate rose 3.02%, while AAOI's estimate remained unchanged. Applied Optoelectronics (AAOI - Free Report) and Lumentum (LITE - Free Report) are key suppliers in the optical networking market. While Applied Optoelectronics specializes in high-speed optical transceivers, laser components, and other fiber-optic networking products that enable AI data center connectivity, Lumentum offers optical and photonic components that support similar high-speed data-center and telecommunications applications.
Applied Optoelectronics or Lumentum — Which of these Optical Networking stocks has the greater upside potential? Let’s find out.
The Case for AAOI StockApplied Optoelectronics is benefiting from the strong momentum in the optical networking market, driven by surging demand for next-generation data center and CATV (cable TV) solutions. In the second quarter of 2026, Datacenter revenues reached $107.66 million, up 140.4% year over year and 32.3% sequentially. The business accounted for 56% of total revenues, supported by stronger shipments of high-speed optical transceivers used in AI-focused infrastructure.
The surge in AI infrastructure deployments that require high-speed optical transceivers has been a major growth driver. This demand is particularly strong for next-generation products such as 400G, 800G, and 1.6T transceivers, which are essential for hyperscale data centers supporting AI workloads. In the second quarter of 2026, 800G revenues were $12.8 million, representing 11.9% of datacenter revenues, and more than doubled sequentially. Meanwhile, 400G revenues totaled $48.4 million, rising more than fourfold year over year and 27.4% sequentially.
In the CATV segment, AAOI achieved record revenues of $80.6 million in the second quarter of 2026, up 43.8% year over year, and secured major wins such as being selected by Mediacom for DOCSIS 4.0 network upgrades. The company’s QuantumLink software and next-generation amplifiers are gaining traction with multiple system operators, providing a diversified revenue base and reducing reliance on any single market segment. AAOI expects CATV revenues to be between $100 million and $110 million in the third quarter of 2026 and expects to generate over $325 million annually in this segment.
The Case for LITE StockLumentum is benefiting from strong demand for its optical components and systems, driven by the industry shift to AI workloads and increased data center connectivity. In the fourth quarter of fiscal 2026, the company reported a 109% year-over-year revenue surge to $1.01 billion, marking its eighth consecutive quarter of top-line growth. This momentum is driven by the accelerating adoption of optical links in data centers, fueled by the rise of AI workloads that demand higher speed and bandwidth.
Key growth drivers include record shipments of 800G cloud transceivers and the launch of next-generation 1.6T modules, as well as strong demand for both EML and CW laser chips. LITE’s pump laser shipments surged more than 80% year over year in the fourth quarter of fiscal 2026, and the company remains effectively sold out despite rapid capacity expansion. Strategic long-term agreements with major customers further secure future demand and support ongoing capital investments.
The market’s shift toward near-packaged optics (NPO) and co-packaged optics (CPO) is also playing directly to LITE’s strengths. Customers are increasingly adopting these architectures as intermediate steps to full CPO deployment, significantly expanding the total addressable market for optical solutions. The company is already seeing strong NPO momentum across multiple high-velocity engagements, leveraging its industry-leading laser chip technology. Lumentum expects a fourfold increase in pump laser shipments over the next several quarters and is expanding capacity at its wafer fabs to capture the coming 200-gig and 300-gig lane speed opportunities.
Price Performance and Valuation of AAOI and LITEIn the trailing 12-month period, AAOI shares have gained 499.3%, underperforming LITE shares, which have risen 653.6%. Lumentum is benefiting from the rapid expansion of AI and cloud infrastructure, which is increasing bandwidth requirements within data centers and accelerating the shift from electrical to optical connectivity.
Despite its expanding portfolio, AAOI is suffering from production capacity and key component supply constraints, which have limited its ability to meet surging customer demand for next-generation AI infrastructure products. The company also faced temporary setbacks in its 100G product line in the second quarter of 2026 due to a memory shortage affecting customers’ ability to source switches. This is likely to result in a $20–25 million revenue shortfall in the third quarter of 2026. Operating expenses were also higher than expected, due to increased shipping costs and elevated R&D spending to qualify new products.
AAOI and LITE Stock Performance
Image Source: Zacks Investment Research
Both AAOI and LITE shares are currently overvalued, as suggested by a Value Score of F.
In terms of forward 12-month Price/Sales, AAOI shares are trading at 5.97X, lower than LITE’s 10.26X.
AAOI and LITE Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for AAOI & LITE?The Zacks Consensus Estimate for AAOI’s 2026 earnings is pegged at 95 cents per share, which has been unchanged over the past 30 days. This indicates a 465.38% increase year over year.
The Zacks Consensus Estimate for LITE’s 2026 earnings is pegged at $18.71 per share, which has increased 3.02% over the past 30 days. This indicates a 115.80% increase year over year.
ConclusionWhile both AAOI and LITE stand to benefit from robust AI-driven optical networking demand, Lumentum appears better positioned, backed by stronger earnings growth, rising estimates and accelerating demand for next-generation optical solutions.
Despite AAOI’s expanding portfolio intensifying competition from larger rivals, production capacity constraints and supply chain challenges remain headwinds that could hurt the company’s financial performance.
Currently, Lumentum has a Zacks Rank #2 (Buy), making the stock a stronger pick than Applied Optoelectronics, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lumentum těží z poptávky po AI a cloudové infrastruktuře, hlavně díky přechodu na 1.6T transceivery a OCS. Ve 4. čtvrtletí fiskálního roku 2026 stoupla ne-GAAP hrubá marže na 50,4 % a provozní marže na 36,6 %.
Key Takeaways Lumentum trades at 11.4X trailing P/S, above the sector and peers Coherent and Cisco Systems.LITE is scaling 1.6T transceivers and OCS as hyperscalers shift AI clusters toward faster optical links.Lumentum's Q4 non-GAAP gross margin hit 50.4%, while the operating margin rose to 36.6%. Lumentum (LITE - Free Report) shares are trading at a premium, as suggested by a Value Score of D. In terms of the trailing 12-month price/sales, LITE is trading at 11.4X, higher than the broader Zacks Computer and Technology sector’s 6.55X. Lumentum is trading at a higher multiple compared with peers, including Coherent’s (COHR - Free Report) 6.4X and Cisco Systems’ (CSCO - Free Report) 6.38X, but at a slightly lower multiple than Broadcom’s (AVGO - Free Report) 11.58X.
LITE Shares Trade at a Premium
Image Source: Zacks Investment Research
Is Lumentum worth buying at current prices? Let us dig deep to find out.
LITE Shares Ride on AI ProspectsYear to date (YTD), Lumentum shares have outperformed the broader sector, as well as Coherent, Cisco Systems and Broadcom. LITE returned a whopping 162.9% YTD while the broader sector, Coherent, Cisco Systems and Broadcom have returned 18.9%, 90.3%, 46.6% and 13.4%, respectively.
LITE Stock’s Price Performance
Image Source: Zacks Investment Research
Lumentum is benefiting from the rapid expansion of AI and cloud infrastructure, which is increasing bandwidth requirements within and between data centers and accelerating the shift from electrical to optical connectivity. The company said that AI compute workloads are increasing in speed and bandwidth, prompting data center architects to rely increasingly on optical links. The company believes that this transition is still in its early stages and is expanding Lumentum’s total addressable market (TAM) across scale-out, scale-across and, increasingly, scale-up connectivity.
The transition from 800G to 1.6T transceivers is expected to support strong systems growth. Lumentum has begun shipping 1.6T cloud transceivers, while hyperscale customers are rapidly transitioning their custom AI clusters from 800G to 1.6T. The company expects 1.6T adoption to accelerate from the first quarter of fiscal 2027 and remain strong through calendar 2027. Lumentum believes that it has been the first to market in several instances, ahead of larger competitors, giving it an opportunity to capture share. Higher-ASP 1.6T products, along with better yields and capacity utilization, are also improving transceiver profitability.
Lumentum’s OCS ramp is supported by strengthening demand under a multi-year, multi-billion-dollar purchase agreement. Systems revenues in the fourth quarter of fiscal 2026 increased 30% sequentially and 123% year over year, aided by record cloud transceiver shipments and the OCS ramp. LITE expects its fiscal first quarter to register more than $100 million in OCS revenues and said that demand visibility for 2027 remains very strong. The company is consequently expanding both internal manufacturing and contract-manufacturer capacity, and broadening the OCS roadmap to additional port counts and specialized configurations.
Co-packaged optics (CPO), near-packaged optics (NPO) and external light source modules are expected to move optics deeper into AI systems and potentially replace copper connections in scale-up networks. Lumentum has seen stronger demand signals from its lead CPO customers, secured an initial ELS module order and is participating in multiple NPO engagements. LITE identifies OCS, 1.6T cloud modules, ultra-high-power CPO lasers, ELS modules and NPO engagements as emerging growth drivers that are increasing the company’s optical TAM.
The growth outlook is increasingly translating into profitability for Lumentum. In the fourth quarter of fiscal 2026, the non-GAAP gross margin was 50.4%, up 1,260 basis points (bps) year over year, while the non-GAAP operating margin was 36.6%, up 2,160 bps. LITE attributed the improvement to manufacturing utilization, favorable product mix and selective price increases. Lumentum guided fiscal first-quarter revenues of $1.225-$1.275 billion and a non-GAAP operating margin of 39.5-40.5%, suggesting further operating leverage as AI-related revenue scales.
LITE’s 2027 Earnings Estimate Revision Shows Rising TrendThe Zacks Consensus Estimate for fiscal 2027 earnings is pegged at $18.71 per share, up 5.1% over the past 60 days, suggesting 115.8% growth from the fiscal 2026 reported figure.
The consensus mark for first-quarter fiscal 2026 earnings is pegged at $3.56 per share, unchanged over the past 60 days and indicating 223.64% growth from the figure reported in the year-ago quarter.
ConclusionLumentum’s premium valuation appears well-supported by its accelerating exposure to AI-driven optical networking demand, expanding addressable market and improving profitability. Strong momentum in 1.6T transceivers, OCS, CPO, NPO and external light source modules should help the company capitalize on hyperscalers’ rising investments in next-generation data center infrastructure.
At the same time, improving product mix, higher manufacturing utilization and operating leverage are translating robust revenue growth into sharply higher margins and earnings. The upward revision in the Zacks Earnings Estimates for fiscal 2027 further underscores improving confidence in Lumentum’s growth trajectory. Investors willing to accept the premium valuation may find Lumentum worth considering as a play on the continued expansion of AI and cloud infrastructure.
Lumentum currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lumentum oznámil ve fiskálním 4. čtvrtletí meziroční růst tržeb o 109 % na něco přes 1 miliardu USD a upravený zisk na akcii (EPS) 3,23 USD. Akcie po výsledcích druhý den vyskočily o více než 13 %.
Shares of Micron Technology and Sandisk have clocked phenomenal returns over the past year, primarily due to the mission-critical role of the memory chips produced by them for running artificial intelligence (AI) workloads in data centers.
Faster memory chips and larger storage help solve a key bottleneck in AI data centers by enabling the rapid transport of large volumes of data to data center accelerators. As a result, accelerator chips, such as graphics cards and custom processors, don't have to sit idle and waste energy. However, a closer look at the AI infrastructure ecosystem makes it clear that memory isn't the only bottleneck impeding accelerator performance.
Image source: Getty Images.
Meet the fast-growing company winning big from the next big AI bottleneck The rapid transport of data has created an incredible demand for optical networking components, which use light to quickly transmit massive amounts of data over long distances via fiber-optic cables. Investment banking and brokerage firm Rosenblatt Securities estimates that optical component companies could increase production capacity by 12x between 2025 and 2030.
However, even that won't be enough to meet the booming demand for optical components. Rosenblatt predicts that supply will trail demand by 50% in 2030 despite the massive increase in production through the end of the decade. This explains why optical and photonics components supplier Lumentum Holdings (LITE +6.81%) has been experiencing incredible growth in revenue and earnings.
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The company released its fiscal 2026 fourth-quarter results (for the three months ended June 27) on Aug. 11, and its shares popped more than 13% the following day. Lumentum easily crushed analysts' expectations, and its guidance makes it clear that the company's red-hot growth momentum is sustainable.
Lumentum's revenue shot up by 109% year over year to just over $1 billion in fiscal Q4, exceeding the $988 million consensus estimate. Its bottom-line growth, however, was the icing on the cake. Lumentum's non-GAAP operating margin increased by 21.6 percentage points year over year in fiscal Q4 to 36.6%. As a result, the company's adjusted earnings per share rose almost 3.7x year over year to $3.23, exceeding the consensus estimate of $2.97.
Lumentum expects its revenue in the current quarter to increase at a stronger pace of 134% year over year to $1.25 billion. The company anticipates adjusted earnings per share to jump from $1.10 in the year-ago period to $4.20 per share in the current quarter, which would be an improvement over the growth it clocked last quarter.
Investors can expect Lumentum's earnings to continue growing at such healthy rates over the long run amid the ongoing supply crunch in optical components. An important point worth noting is that Goldman Sachs expects the optical networking market's revenue to increase by a whopping 9x to $154 billion by 2028.
This should pave the way for robust top-line growth at Lumentum in the long run, while supply constraints should ensure that its margins continue to rise, fueling further earnings growth.
Lumentum stock can keep soaring despite jumping substantially this year Lumentum stock has clocked impressive gains of 140% in 2026, as of this writing. However, the company's terrific earnings growth potential suggests this AI stock is poised for further upside. Lumentum's non-GAAP earnings per share increased by just over 4x in fiscal 2026 to $8.67. The following chart shows that Lumentum's earnings are on track to grow impressively over the next three years.
Data by YCharts
Specifically, Lumentum's earnings are projected to increase by 5.3x in just three years (from fiscal 2026 levels). That translates into a compound annual growth rate (CAGR) of 74%, which is much higher than the 30% and 14% earnings growth that S&P 500 companies are expected to deliver over the next two years.
Lumentum trades at 42 times forward earnings, which is double the forward earnings multiple of the S&P 500 index. However, that valuation is justified by its outstanding growth. Assuming it continues to trade at 43 times earnings after three years and its earnings per share reach $45.98, in line with the consensus estimates shown in the chart above, its stock price could jump to $1,977.
That suggests potential upside of 113% over the next three years, which is why investors looking to add a growth stock can still buy Lumentum, as it could continue to skyrocket due to favorable demand-supply dynamics in the optical components space.
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The optics complex is ripping higher in Monday’s session. AXT (NASDAQ:AXTI) is up 13.71% intraday, with Coherent (NYSE:COHR | COHR Price Prediction) climbing 8.12%, Lumentum (NASDAQ:LITE) adding 6.79%. AXTI is now trading at $92.83, extending a run that has the stock up 399.33% year to date.
Indium Phosphide Price Hikes Detonate the Optics Trade The proximate catalyst is a United Daily News report published Monday out of Taipei detailing severe undersupply in indium phosphide (InP) substrates and epitaxial wafers. Q4 price increases are brewing at more than 10%, which the report calls the largest increase on record. Earlier expectations had been for 3% to 5%. InP substrate prices began rising in Q4 of last year and have already been raised three times, now heading for a fourth consecutive increase. Epitaxial wafers have been raised twice and are heading for a third. A supplier is quoted saying even with money, buyers may not be able to secure supply.
AXT is the natural US-listed read-through. It is a leading producer of InP substrates, and rising InP pricing flows directly to its economics. That leverage was already visible last quarter: Q2 2026 revenue hit $47.6 million, up 164% from Q2 2025, with indium phosphide revenue at $30.7 million, the highest in company history, and non-GAAP gross margin expanding to 45.0%. CEO Morris Young told analysts “customer demand continues to outpace supply no matter how fast we add capacity.” AXT is targeting roughly $60 million per quarter in InP capacity exiting 2026 and ~$130 million per quarter exiting 2027.
Named Taiwanese beneficiaries in the UDN piece include Visual Photonics Epitaxy, LandMark Optoelectronics and IET-KY. None are US-listed, so treat those as supply-chain color rather than investable tickers in most brokerage accounts.
Coherent and Lumentum Ride the Same Wave, With a VR200 Kicker Coherent and Lumentum are the demand side of the InP story. Both are building internal InP capacity and buying substrate from AXT. Coherent’s CEO Jim Anderson said the company is on track to double internal InP output capacity by end of the current quarter, one quarter ahead of original plan, with 80% year-over-year growth in InP laser production in the June quarter. Coherent’s Q4 revenue printed at $2.05 billion, and management guided fiscal Q1 to $2.2 billion to $2.4 billion.
Lumentum flagged the AXT relationship directly. CEO Michael Hurlston told investors “we went out and we found additional substrate help from AXTI. They’ve been a great partner.” Lumentum posted Q4 revenue of $1.01 billion, up 109% year-over-year, with non-GAAP gross margin at 50.4%, and guided Q1 revenue to roughly $1.25 billion.
Adding to Monday’s tone, a Mizuho note published Sunday August 16, 2026 says VR200 NVL72 ramps look strong, a tailwind for Lumentum and Coherent, and also for Wolfspeed on the power-supply side. Wolfspeed’s Q3 update highlighted approximately 30% sequential growth in AI data center revenue from Q2 to Q3, though the SiC story is peripheral to InP pricing.
For readers who want the theme without single-stock risk, the Roundhill Photonics & Optics ETF (CBOE:LYTE), a brand-new fund that began trading in early August 2026, is also trading higher on Monday as the optics basket lifts. Its stated objective is capital appreciation via photonics and optics exposure. The InP squeeze is really an AI data-center story in disguise, and we rounded up seven suppliers powering that buildout, from optics to power to cooling, in a free report you can grab here.
Positioning Backdrop From Friday’s 13F Filings Institutional filings that hit the tape on August 14 (positions as of 2026-06-30) show the smart-money footprint heading into this move. In AXT, D. E. Shaw added, to 2,250,085 shares valued $162,186,127, Millennium Management added, to 854,322 shares valued $61,579,530, and Balyasny opened a new position of 114,386 shares. In Coherent, NVIDIA disclosed 7,788,161 shares valued $3,072,195,870, equal to 4.84% of its 13F portfolio, and SRS Investment Management opened a new position of 929,963 shares valued $366,842,505. In Lumentum, Balyasny added, to 154,180 shares valued $132,295,691. These are point-in-time disclosures as of June 30, and today’s proven catalyst is the UDN InP pricing report.
Contact [email protected] for any questions or corrections.
Lumentum ve 4. čtvrtletí utržil 1,01 mld. USD, nad odhadem, a ve 1Q FY27 čeká první trojciferné tržby z OCS, výrazně nad 100 mil. USD. Firma zároveň hlásí silnou poptávku po AI optice a napjatou nabídku laserů.
Key Takeaways Lumentum's Q4 revenues reached $1.01B, topping the $988.60M consensus estimate.Lumentum expects Q1 FY27 to mark its first triple-digit OCS revenue quarter, above $100M.LITE sees tight laser supply as it expands capacity and prepares for NPO and CPO deployments in 2027-28. Lumentum Holdings Inc.’s (LITE - Free Report) president and CEO Michael Hurlston used the fourth quarter of fiscal 2026 earnings call to stress broadening AI-driven optical demand across transceivers, lasers and optical circuit switches. He said newer growth drivers are only beginning to contribute.
The call centered on a faster revenue path and improving margins. Scale-out and scale-up connectivity demand is also rising while supply remains tight in several laser categories.
LITE Brings $1.25 Billion Target ForwardThe CEO said Lumentum expects to reach its $1.25 billion quarterly revenue target early. He put the timing more than one quarter ahead of the schedule outlined at its last OFC update.
CFO Wajid Ali guided revenues for the first quarter of fiscal 2027 to $1.225 billion-$1.275 billion. He set non-GAAP operating margin at 39.5%-40.5% and earnings at $4.05-$4.35 per share.
Lumentum’s fourth-quarter fiscal 2026 revenues of $1.01 billion topped the Zacks Consensus Estimate of $988.60 million. The company reported quarterly earnings of $3.23 per share, surpassing the Zacks Consensus Estimate of $2.99.
Lumentum Sees Laser Demand Staying TightPump laser shipments rose more than 80% year over year and remain effectively sold out. Lumentum still expects a fourfold shipment increase over the next several quarters.
CEO Michael Hurlston said EML supply remains behind customer demand. The company expects more than 50% EML unit growth in the December 2026 quarter from a year earlier while allocating more capacity to CW lasers.
Global Business Units President Wupen Yuen said supply constraints are influencing customer choices between EML and CW solutions. He said technical considerations also matter as 1.6T volumes expand.
LITE Accelerates 1.6T and OCS RampsThe CEO said most cloud transceiver shipments remained at 800G in the fourth quarter of fiscal 2026, while 1.6T shipments began as planned. He expects 1.6T uptake to intensify in first-quarter fiscal 2027 and continue through calendar 2027.
Hurlston said the first quarter of fiscal 2027 should mark Lumentum's first triple-digit OCS revenue quarter. He expects revenues to be meaningfully above $100 million.
In Q&A, a Citi analyst asked about the prior $400 million OCS outlook for the second half of calendar 2026. The CEO said Lumentum is tracking to that target, not ahead of it, after earlier supply-chain constraints.
Lumentum Expands NPO and CPO OpportunityCEO Michael Hurlston said the lead CPO customer's production plans remain on track and its demand signal has increased. Lumentum expects high-volume scale-up laser shipments in the second half of calendar 2027 for 2028 deployments.
Lumentum also received its first ELS module order for delivery in the second half of calendar 2027. Hurlston said the module has a meaningfully higher selling price than the underlying lasers but lower margins than laser chips.
In Q&A, a JPMorgan analyst pressed on NPO timing. The CEO said leading NPO opportunities are in a similar timeframe, with some about a quarter earlier and initially favoring high-power laser architectures.
LITE Sees More Margin and Capacity LeverageCFO Wajid Ali said non-GAAP gross margin reached 50.4% and operating margin reached 36.6% in the fourth quarter of fiscal 2026. He credited mix, manufacturing utilization and selective pricing.
A Mizuho analyst asked how operating leverage could evolve in fiscal 2027. Ali said the prior 38%-42% operating-margin framework at $2 billion of quarterly revenues could move up 100 to 200 basis points as gross margin improves.
A Wolfe Research analyst asked about indium phosphide substrate supply. CEO Michael Hurlston said ultra-high-power laser demand has accelerated, prompting added supply from AXTI and raising the prospect of substrate support if demand keeps rising.
Lumentum Keeps Focus on ExecutionAcross prepared remarks and Q&A, the CEO emphasized that demand is expanding faster than several capacity ramps. He highlighted high-power lasers while saying OCS execution has returned to plan.
Management's priorities remain capacity expansion, 1.6T growth and OCS scaling. The company is preparing for NPO and CPO deployments expected to broaden optical content in 2027 and 2028.
LITE's Zacks Signals Favor Growth and MomentumLITE currently carries a Zacks Rank #2 (Buy), with a Growth Score of A, Momentum Score of B and VGM Score of B. In the Zacks Style Scores framework, A and B grades represent stronger characteristics, while the Value Score of D is weaker. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Rank #2 and favorable Growth, Momentum and VGM scores support a stronger near-term profile within the Zacks methodology. The Zacks Rank can change as analyst earnings estimates are revised after the just-reported results.
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Live Updates 1 minute ago
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Lumentum just reported earnings, with shares initially down 2% following the report. Here are the key numbers:
Revenue: $1.006 billion vs. $987.70 million expected Adjusted EPS: $3.23 vs. $2.97 expected Quick Read:
Lumentum beat Wall Street’s revenue and earnings expectations, but shares initially moved lower.
Revenue soared 109% year over year and 24% sequentially, reflecting continued momentum across the business.
38 minutes ago
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Beyond the headline guidance, four wildcards could swing tonight’s reaction on Lumentum (NASDAQ:LITE | LITE Price Prediction).
Options positioning skew. The full-chain put/call ratio sits at 1.08, but the September 4 expiration spikes to 11.01, signaling institutional hedging into the post-earnings window.
Insider selling. Despite bullish social sentiment scoring 78, insiders logged 22 recent transactions, net selling, a caution flag consensus is discounting.
OCS ramp execution. The optical circuit switch backlog above $400M requires flawless manufacturing scale-up, and product mix shifts have historically materially impacted profitability quarter to quarter.
Trade and tariff exposure. Export controls, ongoing Huawei bad-debt exposure, and ASP compression are outside sell-side models targeting $1,125.93.
42 minutes ago
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Bull Case AI demand outrunning supply: CEO Michael Hurlston flagged an EML supply-demand imbalance “greater than 30%”, with components “effectively sold out for the foreseeable future.” Beat streak: Four consecutive EPS beats, with Q3 FY26 revenue up 90.1% year over year. Sentiment tailwind: Composite score 69.58 and Reddit readings as high as 82 (very bullish). Bear Case Expectations sky-high: Shares up 599.67% in a year at a 156 trailing P/E. Prior beat, ugly reaction: Q3 FY26 delivered a 4.62% beat yet shares fell 5.48% the next day. Capacity-gate growth: Hurlston warned Lumentum is “significantly under-shipping demand” on pump lasers, with Greensboro not online until 2028. Insiders selling: 22 recent insider transactions, net direction selling. 1 hour ago
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Lumentum enters tonight’s earnings report with management guiding for record quarterly revenue of $960 million to $1.01 billion.
The company also expects an operating margin of 35-36%, which would mark another improvement from 32.2% in Q3.
Investors will be watching for updates on Lumentum’s emerging co-packaged optics and optical circuit switch businesses, which are expected to become important fiscal 2027 growth drivers.
The report will provide a major credibility check on CEO Michael Hurlston’s $2 billion quarterly revenue target and his projection that co-packaged optics could create “greater than $5 billion of incremental revenue.”
With NVIDIA’s $2.02 billion investment now on the balance sheet and additional Greensboro capacity expected in 2028, Lumentum must show that its 600%+ one-year rally is being supported by accelerating fundamentals.
Lumentum Holdings (NASDAQ:LITE) reports Q4 FY2026 earnings after the close today at 4:00 PM ET. With shares up over 600% in the past year driven by AI optical demand, expectations heading into earnings are extraordinarily high.
Momentum Meets Execution Risk Last quarter, Lumentum delivered revenue of $808.4 million, up 90.12% year over year, and non-GAAP EPS of $2.37, beating by 4.62%. Systems revenue climbed 121.1%, and non-GAAP operating margin expanded 700 basis points sequentially to 32.2%.
Despite the beat, shares slipped 5.06% on the print, a signal that expectations had run ahead of the numbers. The stock now trades around $816.56, off from a post-Q3 peak near $1,013. Full-chain put/call sits at 1.14, tilted defensive.
Consensus Estimates Metric Q4 FY26 Estimate YoY Change FY26 Implied Q4 Guide Range Revenue $987.7M +105% ~$2.99B $960M-$1.01B EPS (Non-GAAP) $2.9689 +237% ~$8.11 $2.85-$3.05 Consensus sits near the midpoint of guidance, leaving no cushion. The sequential jump from 32.2% operating margin to 35% requires continued pricing discipline and mix tailwinds.
What I’m Watching Tonight Tonight, I’ll be watching whether gross margin, at 47.9% last quarter, expands further. CEO Michael Hurlston has previously said “there is a lot of room for improvement on gross margin,” driven by better factory absorption and pruned product lines.
I’ll all focus on the EML supply-demand gap Hurlston pegged at “somewhere greater than 30%,” and the plan for supply to “increase 50% on year” by the December quarter.
Analysts will be tracking the pump laser capacity out of Rose Orchard. Hurlston called constraints there “probably the biggest issue,” with narrow linewidth assemblies “effectively sold out for the foreseeable future.”
Investors will be looking for updates on the multi-hundred-million-dollar CPO purchase order for the first half of calendar 2027 as well as the OCS ramp against a backlog exceeding $400M. Finally, watch for new long-term agreements with prepayments or take-or-pay terms tied to CapEx.
Earnings History Quarter EPS Surprise 1-Day Move 7-Day Move 30-Day Move Q3 FY26 +4.62% -5.48% +9.12% -5.18% Q2 FY26 +18.57% +8.35% +23.32% +37.62% Q1 FY26 +7.05% +2.98% +9.05% +47.18% Q4 FY25 -12.88% -4.67% -3.61% +40.37% On average, shares moved +11.21% seven days after earnings over the past year.
Contact [email protected] for any questions or corrections.
Goldman Sachs Asset Management vidí další vítěze AI v optických a vláknových firmách, protože úzké hrdlo se přesouvá z čipů na propojení datových center. Zmiňuje Lumentum a Coherent.
Goldman Sachs Asset Management’s Sung Cho, co-head of public technology investing, argues the AI trade is rotating away from the graphics processor cycle toward companies wiring AI together, specifically optical and fiber equipment makers. His picks: Lumentum (NASDAQ:LITE | LITE Price Prediction) and Coherent (NYSE:COHR).
Cho’s case starts with a shift in workload mix. “One of the most important trends that we’re seeing in the market today is the shift from AI training, driving most of the compute, to AI inference, driving most of the compute,” he said. “Underneath that architecture is a completely different set of architecture, a completely different set of chips, optical equipment. And so the leadership is going to evolve and change as this transition happens.”
Why Connectivity Is the New Constraint The physical footprint changes with inference. “As you go into inference, you need a lot more data centers that are closer to the customers that they’re serving. As a result, we’re just going to have to connect a lot of data centers,” Cho said. Inside those buildings, the wiring becomes the ceiling. “What’s happening is that compute speeds, the processor speeds are no longer the bottleneck. What the bottleneck is, is actually the ability to be able to have chip to chip communication, server to server communication. And right now, a lot of those connections are happening via copper. And that’s going to be replaced by optical as well,” he added.
The supply-side setup gives the trade duration. “One of the unique aspects of optical is that it’s extremely hard to bring new capacity online. And so the demand for optical and fiber is moving at an accelerating rate as a result of this transition. But the ability for the industry to bring capacity online is going to be somewhat limited and keep that duration of that trade,” Cho said. A semiconductor ETF is up 80% year to date but down 20% from its 52-week highs, while memory stocks tripled over the last couple of years despite similar bottleneck labels.
Lumentum: Margin Expansion Backing the Story Lumentum’s fiscal Q3 2026 report, filed May 5, 2026, validated the thesis. Revenue reached $808.4 million, up 90.1% year over year, with non-GAAP EPS of $2.37 and non-GAAP operating margin expanding 700 basis points sequentially to 32.2%. CEO Michael Hurlston flagged optical circuit switches with backlog above $400 million and co-packaged optics with an incremental multi-hundred-million-dollar order deliverable in first half calendar 2027 booked. Details are in the company’s 8-K filing. Shares closed at $813.51 on August 10, up 120.71% year to date and 599.67% over one year.
Coherent: Scaling Capacity to Meet AI Demand Coherent, now an S&P 500 constituent, posted Q3 FY2026 revenue of $1.81 billion, up 20.5% year over year, with Datacenter & Communications contributing $1.36 billion, up 40.6% YoY and now 75% of total revenue. Non-GAAP EPS was $1.41, with non-GAAP operating margin at 20.3%. CEO Jim Anderson said Coherent is on track to double internal InP output by year-end 2026 and more than double again by 2027. NVIDIA’s $2 billion investment anchors a partnership around laser and optical networking gear, with new engines such as CPO/NPO, optical circuit switches, and multi-rail solutions adding $20+ billion in incremental serviceable addressable market by calendar 2030. Shares finished at $325.15, up 76.17% year to date.
What to Watch Next Sell-side positioning tracks Cho’s thesis. Lumentum carries 5 strong buy and 16 buy ratings with an analyst target of $1,125.93, while Coherent shows 4 strong buys and 13 buys against a $394.62 target. Reddit sentiment for LITE swung to very bullish score of 82 on August 4. Monitor InP capacity ramps, CPO order flow into calendar 2027, and whether hyperscaler capex holds through the inference build-out Cho describes.
Contact [email protected] for any questions or corrections.
Lumentum čeká za fiskální 4Q výnosy 960 mil. až 1,01 mld. USD a non-GAAP EPS 2,85 až 3,05 USD. Růst má táhnout silná poptávka po AI a 1,6T transceiverech, brzdí ho ale nedostatek nabídky.
Key Takeaways Lumentum expects fiscal Q4 revenues of $960M-$1.01B and non-GAAP EPS of $2.85-$3.05.Strong cloud and AI demand, 1.6T transceivers and OCS contributions are expected to support growth.Supply constraints in EMLs, pump lasers and OCS could limit Lumentum's ability to meet customer demand. Lumentum (LITE - Free Report) is set to report its fourth-quarter fiscal 2026 results on Aug. 11.
For the to-be-reported quarter, Lumentum expects revenues between $960 million and $1.01 billion. LITE expects non-GAAP earnings in the $2.85-$3.05 per share range.
The Zacks Consensus Estimate for revenues is pegged at $988.56 million, indicating an increase of 105.65% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at $2.99 per share, up by 3 cents over the past 30 days. Lumentum reported earnings of 88 cents in the year-ago quarter.
Consensus Estimate Trend
Image Source: Zacks Investment Research
LITE’s earnings have surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 9.59%.
Let us see how things have shaped up for the upcoming announcement.
Key Factors to Note Ahead of LITE’s Q4 ResultsLumentum’s fourth-quarter fiscal 2026 results are expected to have benefited from continued robust demand across its cloud and AI portfolio, supported by strength in both components and systems. More than half of the anticipated sequential revenue growth (21.3% at current guidance) is expected to have come from components, with the balance driven mainly by high-speed transceivers and additional Optical Circuit Switch (OCS) contributions.
Demand for EML laser chips and scale-across products, including pump lasers and narrow-linewidth laser assemblies, is likely to have remained particularly strong. In the third quarter of fiscal 2026, narrow-linewidth laser shipments had increased more than 120% year over year, and pump laser shipments grew 80%, with these products effectively sold out for the foreseeable future.
Another important fiscal fourth-quarter catalyst is likely to have been the ramp of 1.6T transceivers. Lumentum entered the quarter expecting to increase shipments of 1.6T products, including initial integration of internally sourced CW lasers, while continued yield improvements and lower scrap rates were expected to support transceiver profitability. The transition from 800G to 1.6T also represents a favorable content and pricing dynamic for the company. LITE noted that 200G EMLs used for 1.6T applications carry roughly twice the ASP of the 100G EMLs predominantly used in 800G transceivers.
Meanwhile, favorable product mix, pricing discipline, manufacturing utilization and operating leverage should have supported further earnings expansion. These factors had already lifted fiscal third-quarter non-GAAP gross margin by 540 basis points (bps) sequentially to 47.9% and operating margin by 700 bps to 32.2%.
Despite the favorable demand backdrop, supply constraints could have limited Lumentum’s ability to fully capitalize on customer demand in the fourth quarter of fiscal 2026. Management indicated that the EML supply-demand gap remained above 30%, while pump-laser constraints were even more pronounced, forcing the company to make allocation decisions among customers. OCS growth has similarly been gated by supply-chain tightness amid a substantial increase in requested output.
LITE Shares Outperform Sector Lumentum shares have jumped a whopping 127.4% in the year-to-date period (YTD), outperforming the broader Zacks Computer and Technology sector’s appreciation of 16.9%. The company has outperformed peers like Coherent (COHR - Free Report) and Ciena (CIEN - Free Report) but lagged Marvell Technology (MRVL - Free Report) YTD. Shares of Coherent, Ciena and Marvell Technology have returned 81.1%, 72.7% and 147.6%, respectively, over the same time frame.
LITE Stock’s Price Performance
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Lumentum and Coherent are competitors in high-speed optical modules and transceivers used in data centers and optical links for AI infrastructures. Ciena is a leading provider of optical networking equipment, software and services. Marvell Technology is a competitor in optical networking for AI and data center applications.
The LITE stock is not so cheap, as suggested by the Value Score of F. In terms of the forward 12-month price-to-sales (P/S), LITE is trading at 10.93X, higher than the broader sector and peers. While the sector is trading at 6.54X, Ciena and Coherent trade at 7.63X, and 6.42X, respectively. However, LITE is trading at a discount compared with Marvell Technologies, shares of which trade at 13X.
LITE Stock is Trading at a Premium
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LITE's Prospects Ride on Strong AI DemandLumentum appears well positioned to benefit from a multiyear expansion in optical content as AI infrastructure increasingly shifts from copper toward optics. Beyond its current EML and transceiver strength, the company sees four major growth vectors — OCS, optical scale-out, optical scale-up and transceivers — with several still making only modest contributions to revenues. Management expects OCS and scale-out contributions to become more meaningful ahead, while optical scale-up could see major inflection points beginning in 2027.
The company has also highlighted the transition toward 1.6T and eventually 3.2T connectivity, which should increase optical content requirements. Lumentum’s strong position in differentiated high-performance lasers, where reliability, performance and customer manufacturing yields create meaningful barriers to entry, could enable the company to capture a sizable share of this expansion.
Scale-up connectivity and CPO/NPO represent particularly compelling longer-term opportunities. Lumentum expects optical scale-up to significantly increase optical intensity as connectivity moves inside and between AI racks, potentially creating an opportunity substantially larger than scale-out. According to LITE, optical intensity could increase by at least three times when scale-up takes hold, while CPO demand remained strong and CW-laser requirements continued to rise. OCS offers another substantial runway as customer engagements and use cases broaden, including higher and lower-port-count configurations and potential in-rack applications.
Longer term, Lumentum also intends to broaden its component portfolio beyond lasers into areas such as photonic ICs, photodiodes, laser drivers and potentially TIAs, expanding the company's addressable content within next-generation optical systems.
ConclusionLumentum appears to have entered the fiscal fourth quarter with strong momentum, backed by surging AI-related optical demand, the 1.6T transceiver ramp, tight EML and scale-across supply, improving mix and substantial operating leverage. More importantly, many of its potentially largest opportunities — including OCS, scale-out CPO and especially optical scale-up — remain at relatively early stages of adoption. Lumentum's differentiated laser portfolio, expanding optical footprint and exposure to rising AI connectivity requirements provide a favorable foundation for sustained revenue and earnings growth over the longer term.
Lumentum currently has a Zacks Rank #2 (Buy), which implies that investors should buy the stock ahead of fiscal fourth-quarter earnings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lumentum stock jumped by over 13% in the premarket session after a highly bullish statement from Mizuho. LITE soared to $881, continuing a recovery that started on July 29 when it bottomed at $594. So, will this rally continue amid the rising valuation concerns?
LITE stock has done well this year, helped by the ongoing artificial intelligence boom and the $2 billion investment from Nvidia. It has jumped by over 150% this year and 600% in the last 12 months.
The company’s optical and photonic products are used widely in the data center industry, which is seeing strong demand this year. For one, the top hyperscalers plan to spend over $750 billion in capital expenditure this year, a figure that may continue in the foreseeable future.
Lumentum counts some of the biggest companies as clients. This includes companies like Apple, Microsoft, Amazon, Alphabet, and Cisco.
Analysts are taking note, with most of them having a bullish outlook. In the latest note, a Mizuho analyst reiterated the bullish outlook for the company with a $1000 target. The analyst noted that the company will continue doing well, noting that its top suppliers like AXTI and Landmark continued to publish strong earnings and guidance.
Other top companies have boosted their outlooks for the company. Citigroup reiterated a buy rating, while Northland Securities hiked the target from $1,000 to $1,200. Another bullish outlook came from Citic Securities, which hiked the target from $620 to $1,186.
READ MORE: Why analysts are backing optical networking stocks like Lumentum now
LITE stock is doing well because of the ongoing Lumentum earnings growth. Its recent earnings showed that its cloud and AI business pushed its revenue up by over 90% in the third quarter to $808 million.
Components revenue jumped by 77%, while Systems soared by 24%. Most notably, its gross and net profit margins continued growing as it boosted its prices.
Most notably, the company’s balance sheet has continued improving. Its cash and short-term investments soared to $3.17 billion from $1.15 billion in the second quarter. This increase was partly because of its revenue growth and Nvidia’s investment.
Analysts now believe that the company has more room to grow. Yahoo Finance data shows that analysts expect the upcoming results to show that its revenue jumped by 105% to $987 million. For the year, revenue is expected to jump by 81% to $3 billion, followed by $5.6 billion next year. Lumentum’s earnings-per-share is expected to jump from $2.06 last year to $8.23.
These numbers explain why the company’s valuation has jumped. It has a forward price-to-earnings ratio of 94.80, much higher than the technology sector median of 23. This figure is much higher than the five-year average of 36. As such, these numbers mean that the company will need to publish stronger results to justify the valuation.
LITE stock chart | Source: TradingView
The daily chart shows that the LITE stock has been in a downward trend, forming a descending channel. This channel was part of the bullish flag pattern, a common continuation sign in technical analysis.
The stock has remained above the 200-day Exponential Moving Average (EMA). Also, the Stochastic Oscillator has continued rising. Therefore, it will likely continue rising as bulls target the key resistance level of $1,086, the highest point this year.
Castleark Management LLC decreased its stake in Lumentum Holdings Inc. (NASDAQ:LITE – Free Report) by 97.5% in the 1st quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The firm owned 770 shares of the technology company’s stock after selling 30,383 shares during the period. Castleark Management LLC’s holdings in Lumentum were worth $541,000 as of its most recent SEC filing.
A number of other institutional investors have also recently added to or reduced their stakes in LITE. Hilton Head Capital Partners LLC purchased a new stake in shares of Lumentum during the 1st quarter worth approximately $25,000. Sachetta LLC grew its holdings in shares of Lumentum by 118.8% in the 1st quarter. Sachetta LLC now owns 35 shares of the technology company’s stock worth $25,000 after acquiring an additional 19 shares during the period. V Square Quantitative Management LLC purchased a new position in Lumentum in the 4th quarter valued at approximately $28,000. Truvestments Capital LLC increased its stake in Lumentum by 300.0% in the 4th quarter. Truvestments Capital LLC now owns 76 shares of the technology company’s stock valued at $28,000 after purchasing an additional 57 shares in the last quarter. Finally, Triumph Capital Management acquired a new position in Lumentum during the fourth quarter worth $30,000. Hedge funds and other institutional investors own 94.05% of the company’s stock.
Lumentum Trading Down 6.7% Shares of LITE opened at $711.96 on Tuesday. Lumentum Holdings Inc. has a fifty-two week low of $101.61 and a fifty-two week high of $1,085.68. The company has a market capitalization of $55.39 billion, a PE ratio of 131.84 and a beta of 1.48. The stock has a fifty day moving average of $841.23 and a two-hundred day moving average of $730.69. The company has a debt-to-equity ratio of 0.01, a quick ratio of 0.97 and a current ratio of 1.14.
Lumentum (NASDAQ:LITE – Get Free Report) last posted its quarterly earnings data on Tuesday, May 5th. The technology company reported $2.37 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.27 by $0.10. The business had revenue of $808.40 million for the quarter, compared to analysts’ expectations of $810.21 million. Lumentum had a return on equity of 24.81% and a net margin of 17.61%.The business’s revenue was up 90.1% on a year-over-year basis. During the same quarter last year, the firm earned $0.57 earnings per share. Lumentum has set its Q4 2026 guidance at 2.850-3.050 EPS. As a group, analysts forecast that Lumentum Holdings Inc. will post 6.42 EPS for the current year.
Insider Activity In other Lumentum news, Director Brian Lillie sold 11,951 shares of Lumentum stock in a transaction dated Monday, May 11th. The stock was sold at an average price of $981.64, for a total value of $11,731,579.64. Following the completion of the sale, the director owned 13,959 shares in the company, valued at $13,702,712.76. The trade was a 46.13% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Isaac Hosojiro Harris sold 4,000 shares of the company’s stock in a transaction dated Friday, May 29th. The shares were sold at an average price of $860.00, for a total transaction of $3,440,000.00. Following the transaction, the director directly owned 8,400 shares of the company’s stock, valued at approximately $7,224,000. This represents a 32.26% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 41,260 shares of company stock valued at $38,859,220 in the last three months. Company insiders own 0.43% of the company’s stock.
Wall Street Analysts Forecast Growth A number of analysts have commented on LITE shares. Needham & Company LLC reiterated a “buy” rating and set a $1,040.00 target price on shares of Lumentum in a research report on Tuesday, June 9th. Jefferies Financial Group restated a “buy” rating and issued a $1,200.00 price target on shares of Lumentum in a research report on Wednesday, May 6th. Zacks Research downgraded Lumentum from a “strong-buy” rating to a “hold” rating in a research note on Monday, July 6th. Weiss Ratings reiterated a “hold (c)” rating on shares of Lumentum in a research report on Friday, July 17th. Finally, Raymond James Financial reissued an “outperform” rating and issued a $1,014.00 price objective on shares of Lumentum in a research note on Wednesday, May 6th. Fourteen analysts have rated the stock with a Buy rating and seven have assigned a Hold rating to the company. Based on data from MarketBeat.com, Lumentum currently has an average rating of “Moderate Buy” and an average target price of $1,012.67.
Get Our Latest Stock Report on Lumentum
About Lumentum (Free Report)
Lumentum Holdings Inc, headquartered in San Jose, California, is a leading provider of photonic technologies that enable high-speed optical communication networks and advanced industrial applications. The company designs and manufactures a broad range of lasers, optical modules and subsystems tailored to the evolving requirements of telecommunications carriers, cloud data centers and enterprise networking.
Its core product portfolio includes tunable and fixed-wavelength laser transmitters, coherent optical engines, transceivers for long-haul, metro and data center interconnects, as well as test and measurement instruments.
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Výsledky společnosti Alphabet posílily optimismus kolem firem dodávajících optické sítě a datacentrové komponenty pro AI, včetně Lumentum. Barclays navíc zvýšila doporučení pro akcie LITE na Overweight; ve čtvrtek přidaly 1,8 %.
Alphabet's latest earnings report has renewed optimism for companies like Lumentum supplying optical networking and data center components, even as investors scrutinize the rising cost of artificial intelligence infrastructure.
While some investors focused on Alphabet's higher capital expenditure plans, Stifel analysts said the company's results reinforced expectations that AI infrastructure spending remains robust.
“The first hyperscaler print this earnings cycle reinforces our view that the AI data center buildout is not decelerating,” the analysts wrote following Alphabet's quarterly results.
Alphabet's continued investment is viewed as a positive signal for suppliers of interconnects, optics and networking hardware used in AI data centers.
The company is one of several hyperscalers, alongside Microsoft and Amazon, that are investing heavily in expanding AI infrastructure.
According to Stifel, Alphabet's results support companies with significant exposure to AI data center deployments.
Stifel identified Lumentum Holdings, Celestica and Coherent as the hardware companies with the greatest exposure to Alphabet's spending.
The brokerage also pointed to Marvell Technology as an important supplier of optical digital signal processors, while Semtech was highlighted for its growing supply of active copper cable to Alphabet.
Monolithic Power Systems was also identified as having meaningful exposure through power-related products.
“This initial read is overwhelmingly positive for the space and should skew positive for the CapEx spend insights from the other hyperscaler reports to follow,” the analysts added.
The brokerage suggested investors could look at these companies ahead of earnings from other hyperscalers. Microsoft is scheduled to report results on July 29, followed by Amazon on July 30.
Lumentum shares gained after Barclays also upgraded the stock to Overweight, citing strong demand for the company's optical and laser components used in AI data centers.
Barclays also assigned a $1,000 price target while pointing to expectations ahead of Lumentum's fiscal fourth-quarter earnings in August.
Lumentum stock LITE gained 1.8% on Thursday's session.
Lumentum has increasingly positioned itself as a beneficiary of the AI infrastructure boom by expanding its portfolio of optical and photonic technologies.
According to Seeking Alpha analysts, the company has diversified beyond legacy telecommunications markets through acquisitions including Oclaro, NeoPhotonics, IPG Photonics and Cloud Light Technology.
These deals have expanded Lumentum's exposure to cloud computing, AI, machine learning and high-speed optical networking.
The company reported that its Cloud & Networking segment accounted for 85.7% of fiscal 2025 revenue, up from 58.9% in fiscal 2022 under its previous Telecom and Datacom reporting structure.
The analysts also highlighted several long-term growth opportunities, including Optical Circuit Switches, expanding optical scale-out deployments and the anticipated transition toward optical scale-up architectures beginning in 2028.
Lumentum reported fiscal third-quarter 2026 revenue of $808.4 million, up 90.1% year over year, supported by accelerating laser sales tied to AI infrastructure demand.
Looking ahead, the analysts said broader adoption of Co-Packaged Optics for application-specific integrated circuits could drive additional demand for Lumentum's next-generation ultra-high-power lasers beginning in 2027.
At the same time, the experts warned that Lumentum continues to face execution risks, including elevated debt levels, uneven cash generation and shortages of critical components that could affect future capacity expansion.
Lumentum hlásí rekordní dodávky laserových čipů: výnosy z 200G EML se mezikvartálně více než zdvojnásobily a celkové dodávky meziročně vzrostly dvojnásobně. Firma očekává, že objem EML poroste o více než 50 % do prosincového čtvrtletí 2026.
Key Takeaways Lumentum's 200G EML revenues more than doubled sequentially as total laser-chip shipments doubled YoY.EML unit volumes are expected to grow over 50% by December 2026, supported by expanded InP fab capacity.CPO laser chips could generate meaningful revenues by late 2026, backed by a major purchase order. Lumentum Holdings (LITE - Free Report) is well positioned to accelerate revenue growth as surging AI infrastructure investments drive record demand for its laser chips, a critical building block of high-speed optical networking. In third-quarter fiscal 2026, the company delivered record EML (electro-absorption modulated laser) shipments, with 200G EML revenues more than doubling sequentially and total laser chip shipments doubling year over year. Management also expects EML unit volumes to grow more than 50% by the December 2026 quarter, underscoring strong customer demand.
The opportunity extends beyond shipment growth. Lumentum's laser chips are increasingly powering 800G and upcoming 1.6T optical transceivers, while internal deployment of its continuous-wave (CW) lasers enhances vertical integration and captures more value across the optical networking stack. Meanwhile, with the production capacity of its wafer fab in Japan fully allocated, the company has acquired a fifth Indium Phosphide (InP) fab to expand production capacity and meet the demand for future growth.
Lumentum's next growth wave could come from co-packaged optics (CPO), where ultra-high-power laser chips are on track for meaningful revenue generation by late 2026, supported by a multi-hundred-million-dollar purchase order and collaborations with multiple customers.
Strong forward guidance further supports the continued growth of laser chips. Lumentum expects fourth-quarter fiscal 2026 revenues in the range of $960 million to $1.01 billion, up sequentially, reflecting sustained demand. The company also projects non-GAAP operating margins of 35%-36%, suggesting that higher laser chip shipments and a richer product mix should continue driving both revenue growth and profitability.
How Lumentum Stacks Up to CompetitorsLumentum competes directly with Applied Optoelectronics, Inc. (AAOI - Free Report) in AI optical networking as both target hyperscale AI deployments with high-speed transceivers and laser technologies. Applied Optoelectronics emphasizes vertically integrated laser manufacturing, rapid 800G/1.6T capacity expansion and CPO-ready external laser sources. Applied Optoelectronics expects AI demand to exceed production through 2027, while Lumentum counters with broader laser-chip, optical switching and scale-across photonics leadership.
On the other hand, Broadcom Inc. (AVGO - Free Report) competes with Lumentum across AI optical networking, photonics and co-packaged optics for hyperscale AI clusters. Broadcom combines Ethernet switching, DSPs, EML lasers and CPO leadership with deep hyperscaler partnerships and massive AI infrastructure investments. Broadcom benefits from unmatched networking scale, while Broadcom faces Lumentum's strengths in laser chips, optical components and scale-out/scale-across photonic systems.
LITE’s Share Price Performance, Valuation & EstimatesShares of Lumentum have surged 117.5% in the past six months, outperforming the broader Zacks Computer and Technology sector’s growth of 12.1%.
LITE’s 6-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, LITE trades at a forward price-to-earnings ratio of 38.62, above the industry’s average of 37.2. LITE carries a Value Score of D.
LITE’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lumentum’s fiscal 2027 earnings is pegged at $18.07 per share, implying a year-over-year increase of 121.15%. The EPS estimates for fiscal 2027 have risen in the past 60 days.
Image Source: Zacks Investment Research
Lumentum stock carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lumentum rozšiřuje své portfolio co-packaged optics (CPO) pro AI infrastrukturu a podle plánu vyrábí ultra-výkonné laserové čipy. CPO a OCS mají s rostoucím nasazením přinášet dodatečné příjmy.
Key Takeaways Lumentum is expanding CPO as a potential long-term growth driver for AI infrastructure.LITE is scaling ultra-high-power laser chips, with production progressing on schedule.Lumentum's AI portfolio includes pump lasers, EML chips, cloud transceivers and OCS. Lumentum Holdings (LITE - Free Report) is expanding its co-packaged optics (CPO) portfolio, positioning the technology as a potential long-term growth driver as AI infrastructure investments accelerate. The company expects CPO, alongside Optical Circuit Switches (OCS), to contribute incremental revenues as commercial deployments ramp, supporting both revenue and earnings growth.
The company is scaling production of ultra-high-power laser chips specifically designed for CPO applications, with manufacturing progressing on schedule and commercial contributions expected to increase as deployments expand. These investments build on Lumentum's leadership in optical components, allowing it to leverage its expertise in semiconductor lasers and photonic technologies rather than entering an entirely new market.
Beyond CPO, the strategy complements Lumentum's broader AI networking portfolio, including pump lasers, narrow-linewidth laser assemblies, EML laser chips, cloud transceivers and OCS, strengthening its position across multiple layers of next-generation AI data-center infrastructure.
The opportunity is supported by structural industry trends. As hyperscale AI clusters become larger and more power-intensive, traditional electrical interconnects face bandwidth and energy-efficiency limitations, increasing the need for optical technologies such as CPO. Lumentum's ongoing investments in manufacturing capacity and high-performance laser technologies position it to benefit as customers transition toward these advanced architectures.
If adoption accelerates as expected, CPO could emerge as another significant growth engine alongside Lumentum's fast-growing AI networking business, supporting the company's robust growth outlook. The Zacks Consensus Estimate projects revenues to increase 81.9% in fiscal 2026 and 86.4% in fiscal 2027 year over year.
Lumentum's Rivals in Co-Packaged OpticsMarvell Technology (MRVL - Free Report) competes with Lumentum through its broad silicon photonics platform, supporting both CPO and NPO architectures. MRVL leverages partnerships, Tier 1 hyperscaler engagements and multiple photonic technologies to capture scale-up networking opportunities. While Lumentum focuses on laser chips and CPO modules, MRVL distinguishes itself through integrated interconnect, switching, and custom silicon capabilities, thereby strengthening its position in AI infrastructure.
Broadcom Inc. (AVGO - Free Report) rivals Lumentum by combining CPO with Ethernet switching, DSPs, CW and EML lasers, offering an end-to-end AI networking platform. AVGO positions its CPO portfolio as the industry standard while benefiting from leadership in networking silicon and hyperscaler relationships. Compared with Lumentum's laser-focused strategy, AVGO gains scale through tightly integrated semiconductor and networking solutions. It continues expanding this advantage.
LITE’s Share Price Performance, Valuation & EstimatesShares of Lumentum have skyrocketed 700% over the past year, outperforming the Zacks Communication - Components industry’s appreciation of 304.8% and the broader Computer and Technology sector’s growth of 35%.
LITE’s One-Year Price Performance
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From a valuation standpoint, LITE trades at a forward price-to-earnings ratio of 40.61, below the industry’s average of 44.03. LITE carries a Value Score of F.
LITE’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lumentum’s fiscal 2027 earnings is pegged at $17.81 per share, suggesting robust year-over-year growth of approximately 118.77%. Notably, earnings estimates have moved higher over the past 30 and 60 days, reflecting improving analyst confidence in the company's growth outlook.
Image Source: Zacks Investment Research
Lumentum stock sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Takeaways Lumentum shares soared 700% in a year, far outpacing its industry and key optical peers.AI and cloud demand is driving optical connectivity, Components momentum, CPO and OCS growth.Strong cash, rising estimates and premium valuation support LITE as a growth-oriented buy. Lumentum Holdings’ (LITE - Free Report) shares have delivered extraordinary gains over the past year, soaring 700%, far outpacing the industry's 304.8% rally and the broader Zacks Computer and Technology sector's 35% growth.
Lumentum's gains have also significantly exceeded those of key industry peers, including Ciena (CIEN - Free Report) , Corning (GLW - Free Report) and Viavi Solutions (VIAV - Free Report) . The industry's strong momentum has been mirrored in stellar stock performance, with Ciena, Corning and Viavi Solutions gaining 452.8%, 270.1% and 312.2%, respectively, over the same period.
The remarkable growth has been driven by surging AI and cloud infrastructure demand, which has accelerated the adoption of its optical connectivity solutions. The company is also benefiting from exceptional momentum in its Components business, supported by strong demand for AI networking products. Investor confidence has further strengthened as Lumentum expands its portfolio of next-generation optical networking technologies, including Co-Packaged Optics (CPO) and Optical Circuit Switches (OCS), which are expected to become important long-term growth drivers.
LITE’s One-Year Price Performance
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Following such an exceptional run, investors might be wondering whether the stock remains an attractive investment or if the optimism surrounding its prospects is already priced in. Let's examine Lumentum’s fundamentals, growth prospects and valuation.
LITE Benefits From Strong AI and Cloud Infrastructure DemandLumentum is benefiting from the rapid expansion of AI and cloud infrastructure, as hyperscalers continue investing heavily in next-generation optical networking to support increasingly complex AI workloads. Demand remains broad across transceivers, EML laser chips and data center interconnect (DCI) components, while shipments of narrow-linewidth laser assemblies grew for the ninth consecutive quarter and pump laser shipments increased 80% year over year in the third quarter of fiscal 2026.
As hyperscalers build larger AI clusters, they are increasingly adopting distributed "scale-across" architectures that require high-bandwidth optical interconnects between data centers, creating a long runway for Lumentum's pump lasers, wavelength-selective switches (WSS) and precision laser technologies.
The long-term opportunity extends well beyond current demand. Lumentum is ramping 1.6T transceivers, expanding ultra-high-power laser production for co-packaged optics (CPO) and advancing optical circuit switching (OCS), supported by a multi-year, multi-billion-dollar purchase agreement. Several AI-focused products remain supply-constrained and effectively sold out, highlighting demand that exceeds current manufacturing capacity. Management also emphasized that scale-up CPO — its largest long-term growth driver — is still in its early stages, while cloud modules, EML lasers and scale-across products continue to gain momentum. These factors position Lumentum to benefit from sustained AI infrastructure spending and support continued revenue growth, margin expansion and long-term earnings potential.
LITE's Financial Strength Supports Long-Term GrowthLumentum's strong financial position provides the flexibility to continue investing for long-term growth while capitalizing on the expanding opportunities in AI and cloud infrastructure. At the end of the third quarter of fiscal 2026, the company held $3.17 billion in cash, cash equivalents and short-term investments, an increase of more than $2 billion sequentially, primarily driven by the issuance of Series A Convertible Preferred Stock. The strengthened balance sheet equips Lumentum to fund capacity expansion, support strategic investments and maintain the manufacturing scale needed to meet rising demand for AI networking products.
The company's financial strength is accompanied by improving operating performance and disciplined execution. Operating cash flow surged to $388.4 million during the first nine months of fiscal 2026, while record revenues, favorable product mix and higher manufacturing utilization drove meaningful gross and operating margin expansion. Management also continues to invest in critical research and development programs serving cloud and AI customers without compromising cost discipline, demonstrating the scalability of its business model.
Driven by ample liquidity, rising profits and sustained investment in cutting-edge technologies — such as co-packaged optics (CPO), optical circuit switching (OCS) and high-speed optical components — Lumentum is well-positioned to execute its long-term growth strategy and capitalize on ongoing investment opportunities within the artificial intelligence (AI) infrastructure sector.
LITE’s Healthy Capital ReturnsLumentum demonstrates strong profitability, as reflected by its trailing 12-month return on equity (ROE) of 36.22%, well above the industry average of 19.12%. A higher ROE indicates the company's ability to generate greater profits by efficiently utilizing shareholders' capital.
Image Source: Zacks Investment Research
LITE’s Strong Top- & Bottom-Line ProspectsThe Zacks Consensus Estimate for the company’s fiscal first quarter 2027 revenues is pegged at $1.13 billion, indicating a robust 112.3% year-over-year increase. For fiscal 2027, the top line is anticipated to rise 86.4% year over year.
On the earnings front, the consensus estimate for fiscal first-quarter 2027 is pegged at $3.46 per share, reflecting a substantial 214.5% year-over-year increase, while fiscal 2027 earnings are expected to surge 118.7%.
Notably, analysts have raised their earnings estimates for both the fiscal first quarter and full-year fiscal 2027 over the past 60 days. These upward estimate revisions underscore growing confidence in Lumentum's strong business model, expanding AI-driven growth opportunities and its ability to deliver sustained financial performance.
LITE Deserves a Premium for Its Growth ProspectsThe company’s strong exposure to rapidly growing AI infrastructure markets, expanding demand for optical networking products and leadership in co-packaged optics (CPO), laser chips and cloud photonics technologies justify a premium valuation, as suggested by a Value Score of F.
Lumentum is currently trading at a forward 12-month price-to-sales (P/S) ratio of 10.1X, well above both the broader technology sector and its industry peers. By comparison, the sector trades at 6.88X, while Ciena, Corning and Viavi Solutions trade at 8.35X, 8.32X and 5.47X, respectively.
Price/Sales Ratio (F12M)
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LITE Stock: A Strong Buy for GrowthGiven Lumentum's impressive growth, strong financial position and expanding opportunities in AI and cloud infrastructure, we recommend a buy. The company has demonstrated strong profitability, supported by healthy returns on equity. Its leadership in optical networking technologies, including CPO, OCS and high-speed photonics, continues to drive growth. With ample liquidity and upward earnings estimate revisions, Lumentum is well positioned for sustained long-term growth. Although the stock commands a premium valuation, its fundamentals justify it, making LITE a strong buy for growth-oriented investors.
LITE stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lumentum ve 3. čtvrtletí fiskálního roku 2026 zvýšil tržby divize Components na rekordních 533,3 mil. USD, tedy 66 % celkových tržeb. Firma čeká, že ultra-výkonné laserové čipy a CPO začnou významně přispívat později v roce 2026.
Key Takeaways Lumentum's Components segment hit a record $533.3M, making up 66% of Q3 revenues.AI data-center demand drove record EML chip shipments and strong laser assembly growth.Ultra-high-power laser chips and CPO are expected to become meaningful contributors later in FY26. Lumentum Holdings’ (LITE - Free Report) component business is accelerating rapidly, positioning the company for continued revenue growth as AI-driven demand for optical networking solutions remains robust. In the third quarter of fiscal 2026, Lumentum's Components segment generated a record $533.3 million, accounting for 66% of total revenues, while revenues climbed 20.2% sequentially and 77.3% year over year, underscoring that components have become the primary engine of its business expansion.
The strong performance was driven by record shipments of electro-absorption modulated laser (EML) chips, more than 120% year-over-year growth in narrow-linewidth laser assemblies and 80% growth in pump lasers, fueled by rising demand from hyperscale AI data centers. Management also noted that several high-growth component categories remain effectively sold out, while its Japan wafer fabrication capacity is fully allocated, indicating sustained customer demand and strong revenue visibility.
Lumentum is also laying the groundwork for its next phase of growth through ultra-high-power laser chips and co-packaged optics (CPO), which management expects to become meaningful revenue contributors later in 2026. The richer mix of premium AI components helped lift non-GAAP operating margin to 32.2% in the reported quarter, demonstrating that the company is not only growing revenue but also improving profitability.
Lumentum's recent updates underscore that optical components are becoming indispensable to next-generation AI infrastructure, with co-packaged optics emerging as another meaningful growth driver. As hyperscale cloud providers accelerate investments in AI networking, the company's expanding portfolio of advanced optical components is well positioned to capture this demand. Its increased fourth-quarter fiscal 2026 revenue guidance of $960 million-$1.01 billion further suggests that management expects the strong momentum in the Components segment to continue, strengthening LITE's long-term growth outlook.
Lumentum Faces Stiff CompetitionLumentum faces stiff competition from Coherent Corp. (COHR - Free Report) and Applied Optoelectronics (AAOI - Free Report) as AI-driven demand for optical components, photonics and data center networking continues to accelerate.
Coherent challenges Lumentum through broad photonics capabilities, 800G/1.6T transceivers, optical circuit switches and co-packaged optics. Coherent strengthens its edge with 6-inch indium phosphide production, long-term supply agreements and aggressive capacity expansion. The company also benefits from robust AI networking demand, expanding backlog and differentiated manufacturing scale.
Applied Optoelectronics competes with Lumentum by scaling 800G and 1.6T transceivers, expanding U.S. manufacturing and leveraging in-house laser production. Applied Optoelectronics emphasizes automation, production flexibility and capacity growth to address accelerating AI infrastructure demand. It also targets co-packaged optics and hyperscale customers, reinforcing its long-term growth strategy.
LITE’s Share Price Performance, Valuation & EstimatesShares of LITE have surged 132.8% year to date compared with the Computer and Technology sector’s growth of 18.2%.
LITE’s YTD Price Performance
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From a valuation standpoint, LITE trades at a forward price-to-sales ratio of 22.26X, significantly higher than the sector’s average of 6.62X. LITE carries a Value Score of F.
LITE’s Valuation
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The Zacks Consensus Estimate for LITE’s fiscal 2027 earnings implies year-over-year growth of 118.77%. The consensus estimate for fiscal 2027 has been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Lumentum stock carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
