New York, Feb 23, 2026, 11:31 (ET) — Regular session
- Lumentum shares rise about 1% in late-morning trade, after slipping before the open.
- GF Securities raises its price target to $765 and keeps a Buy call.
- Peer Applied Optoelectronics jumps; Coherent and Nvidia trade little changed.
Lumentum Holdings Inc (LITE.O) shares rose about 1% to $674.10 in late-morning trading on Monday, after an analyst note kept the spotlight on the company’s AI-linked optics ramp. GF Securities raised its price target to $765 and said 2027 could be a “key inflection year,” with analyst Jeff Pu projecting CPO/NPO laser revenue of $124 million in 2026, $500 million in 2027 and $1.7 billion in 2028. Applied Optoelectronics gained about 5%, while Coherent and Nvidia were little changed. (GuruFocus)
The call matters because Lumentum has turned into a live test of how fast big data-center networks rewire for AI. Investors have chased the stock on the idea that demand for faster links will shift spending away from older telecom builds and into new optical gear, but the timing is messy.
That timing hinges on co-packaged optics — a design that pushes optical engines closer to switching chips to cut power and move data faster — and related “near-packaged optics” approaches. If deployments slip, the revenue curve moves with them, and a stock that already trades like a high-beta proxy for AI capex can swing hard. (Marvell Technology)
Lumentum sells optical components and photonic products used in telecom, enterprise and data-center networks, along with commercial lasers used in manufacturing and other applications. The stock’s latest move comes as traders try to map how much of the next buildout lands in optics, and who captures the content.
In its most recent quarterly update, Lumentum reported fiscal second-quarter net revenue of $665.5 million and non-GAAP diluted earnings per share of $1.67, and guided fiscal third-quarter revenue to $780 million to $830 million. CEO Michael Hurlston said the company was “only at the starting line” for optical circuit switches and co-packaged optics — products that steer or carry light to relieve bottlenecks inside fast networks. (Lumentum Investor Relations)
Optical circuit switches, or OCS, matter because they can route light without converting it back to electricity, which can save power and reduce delays. That pitch has landed with cloud customers building denser AI clusters, and it feeds directly into the debate over how fast new architectures move from lab to racks.
But the downside case is straightforward. If hyperscalers slow spending, or if the shift toward co-packaged designs runs into manufacturing, heat-management or standards problems, the ramp could come later and look smaller, leaving the stock exposed after a sharp run.
Traders’ next hard catalyst is March 17, when Lumentum plans an investor briefing at the Optical Fiber Communication Conference and Exhibition (OFC) in Los Angeles. Investors will be listening for any fresh numbers on order timing, capacity and the 2027 delivery window that analysts are leaning on. (Lumentum Investor Relations)
