Analyst Christopher Rolland of Susquehanna reiterated a Buy rating on Lumentum Holdings (LITE – Research Report), retaining the price target of $115.00.
Christopher Rolland has given his Buy rating due to a combination of factors including Lumentum Holdings’ impressive performance in AI-driven data centers and strong cloud networking guidance. The company is experiencing a robust demand from its hyperscale customers, notably in the data communication sector, where it has set a record for EML unit shipments and expects to capture more market share with its advanced transceiver modules. Additionally, Lumentum has started pre-production shipments for proprietary laser solutions aimed at AI infrastructure, with expectations for significant volume increases by 2026.
Despite current capacity constraints and yield issues affecting some of its new transceiver products, Lumentum’s management remains optimistic about overcoming these challenges while continuing to enhance its production capabilities. The company is seeing revenue growth from key clients like Google and is in the qualification phase with others like Oracle. Moreover, despite a slight decline in industrial tech guidance, the firm is on track to achieve a $500 million quarterly run rate by year’s end. The positive long-term outlook, particularly focused on AI interconnections, supports the Buy rating with a target price of $115.
In another report released today, Needham also maintained a Buy rating on the stock with a $110.00 price target.
