Why Lumentum (LITE) Could Benefit From AI Optical Networking Demand as Co-Packaged Optics Adoption Accelerates

Habib Ur Rehman

Sat, July 11, 2026 astatine 3:10 PM CDT 2 min read

Lumentum Holdings Inc. (NASDAQ:LITE) is 1 of the best performing AI stocks implicit the past 3 years, with a 3Y CAGR of 143.31%. On June 11, JPMorgan expert Samik Chatterjee reiterated an Overweight standing and maintained a $1,130 terms target, arguing that the caller pullback successful optical-networking stocks had created a buying opportunity.

Chatterjee said Lumentum shares had fallen astir 15% from their early-June precocious arsenic investors disquieted astir constricted summertime catalysts and imaginable delays successful co-packaged optics adoption. He pushed backmost connected those concerns, citing supply-chain checks indicating that Nvidia's large-scale CPO rollout remained connected way and whitethorn beryllium up of schedule. JPMorgan besides pointed to increasing involvement from cloud-service providers and different customers, which could broaden request beyond Nvidia.

Co-packaged optics places optical engines adjacent to power chips to summation bandwidth portion reducing powerfulness depletion successful ample AI systems. JPMorgan viewed Lumentum's valuation of astir 25 times estimated 2028 net arsenic reasonable, fixed projected yearly net maturation supra 40%. The thesis inactive depends connected deployment schedules, lawsuit attraction and Lumentum's quality to person merchandise request into sustained shipments and net growth.

Lumentum Holdings Inc. (NASDAQ:LITE) develops optical and photonic technologies for AI and unreality networking, telecommunications, concern manufacturing and sensing, including lasers, components, modules and optical subsystems.

While we admit the imaginable of LITE arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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