Lumentum Stock Set For Fresh Peak: CEO Says Strong Data Center Demand Will Fill Up Orders Through 2028

• LITE stock gained 6% in the overnight sessions heading into Friday.
• ‘We would be sold out through all of 2028 within two quarters,’ Hurlston.
• Stocktwits sentiment for LITE improved to ‘bearish’ on Friday.

Lumentum Holdings’s stock is gearing up for fresh record highs following its best session in nearly three weeks, surging nearly 6% in the overnight session heading into Friday, after the optical and photonic components maker highlighted strong order visibility for the next three years.

CEO Michael Hurlston told Bloomberg on Friday that the demand for its optical components from U.S. cloud companies is accelerating and on track to fill its order book through 2028.

“The capex numbers from the U.S. hyperscalers are enormous, and there seems to be no end in sight,” Hurlston said in an interview. “We’re falling further and further behind the demand. We would be sold out through all of 2028 within two quarters.”

AI Boom Lifts Data Center Component Suppliers

Lumentum develops lasers, optical components, and allied software that power AI data centers, telecom networks, and cloud infrastructure. Its products are used for high-speed data transfers, enable features like Face ID in smartphones, and support precision cutting and manufacturing in industrial settings.

An incredible buildout of data centers by top hyperscalers Microsoft, Amazon, and Google, along with the broader AI boom, has brought Lumentum into the spotlight. Its sales have climbed by over 50% in each of the last three quarters – the first time since 2017, and LITE stock has surged more than 1,500% over the past year.

Last month, AI chip giant Nvidia announced a $2 billion investment in Lumentum as part of a wider partnership that includes multibillion-dollar purchase commitments, and support for research and development and capacity expansion.

Optical interconnect technology and package integration are critical for the continued scaling of AI factories, improving the energy efficiency and resiliency of large-scale AI networks, Nvidia said at the time.

Analyst, Retail View On LITE

JPMorgan sharply raised its price target on Lumentum to $950 from $565 on Thursday, maintaining an ‘Overweight’ rating and citing stronger-than-expected visibility across its key growth drivers. 

On Stocktwits, the LITE ticker trended heavily on Friday morning. Retail sentiment was ‘bearish,’ although it improved from ‘extremely bearish’ the previous day.

“Photonics companies are generating huge hype, yet many aren’t actually expensive… $LITE, $COHR, and $TSEM are the three companies most closely connected to NVIDIA’s photonics ecosystem,” said a user.

Lumentum is now repurposing old electronics fabrication facilities where it can, which is helping it bring a new factory online in half the time it would take to build from scratch, Hurlston said, according to the Bloomberg report. In Japan, the company is committing $100 million in new investments, with that likely to escalate to around $250 million, he said.

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