New York, Feb 23, 2026, 11:31 (ET) — Regular session underway
- Lumentum shares claw back about 1% in late-morning trading, recovering after slipping ahead of the open.
- GF Securities bumps its price target up to $765, sticking with its Buy rating.
- Shares of Applied Optoelectronics pop, while Coherent and Nvidia barely move.
Lumentum Holdings Inc (LITE.O) picked up nearly 1%, trading around $674.10 by late morning Monday, after a fresh analyst note kept attention fixed on the company’s optics ramp tied to AI. GF Securities upped its price target to $765, calling 2027 a “key inflection year.” Analyst Jeff Pu now sees CPO/NPO laser revenue landing at $124 million for 2026, then jumping to $500 million in 2027 and $1.7 billion in 2028. Applied Optoelectronics climbed roughly 5%. Shares of Coherent and Nvidia barely budged. GuruFocus
This call is drawing attention since Lumentum has become something of a real-time case study for how quickly major data-center operators are moving to upgrade for AI. Hopes around the stock have hinged on the bet that the rush for speedier connections will pull spending from legacy telecom projects and redirect it toward advanced optical equipment. The catch: timing is anything but clear-cut.
Everything depends on when co-packaged optics finally hit—put simply, that’s about getting optical engines right up next to switching chips to shave power and help data zip. “Near-packaged optics” comes into play too. If rollouts get delayed, revenue slips in tandem, and the shares—already behaving like a high-beta stand-in for AI infrastructure spending—can lurch in either direction. Marvell Technology
Lumentum makes optical components and photonic products for telecom, enterprise, and data center networks, plus commercial lasers for manufacturing and other uses. Traders are now working to gauge just how much of the upcoming buildout drives demand for optics—and which companies, exactly, get a piece of the action.
Lumentum turned in net revenue of $665.5 million for its fiscal second quarter, with non-GAAP diluted EPS landing at $1.67. Looking ahead, the company set its third-quarter revenue outlook in a range of $780 million to $830 million. CEO Michael Hurlston put it bluntly: they’re “only at the starting line” when it comes to optical circuit switches and co-packaged optics—gear designed to keep traffic moving inside high-speed networks. Lumentum Investor Relations
Optical circuit switches, or OCS, route light signals without turning them back into electricity—saving power and cutting latency. That’s been a selling point for cloud providers assembling denser AI clusters, and it’s become central to the current debate over how quickly these new architectures jump from lab experiments to actual data center racks.
The bear case is clear enough: a pause in hyperscaler spending, or delays tied to co-packaged design—be it manufacturing hiccups, heat issues, or standards snags—and suddenly the ramp happens later, maybe doesn’t look as big. After such a steep rally, the stock could be left out on a limb.
The next major event for traders lands March 17: Lumentum is slated to hold its investor briefing at the Optical Fiber Communication Conference and Exhibition (OFC) in Los Angeles. Investors will be watching for new details—timing on orders, capacity updates, anything on the 2027 delivery window that analysts have been banking on.
