Lumentum Holdings Inc. (LITE) is poised to benefit from a surge in artificial intelligence (AI) infrastructure spending, particularly in optical connectivity solutions. The company reported a doubling of optical circuit switch (OCS) shipments in Q4 of fiscal 2026 and projects over $400 million in OCS revenues in the latter half of 2026. Lumentum anticipates achieving its first triple-digit OCS revenue quarter by Q1 of fiscal 2027.
The company is also optimistic about its co-packaged optics (CPO) market, forecasting ultra-high-power laser revenue to reach approximately $50 million by the end of calendar year 2026. As competitors like Marvell Technology and NVIDIA ramp up their own solutions, Lumentum continues to position itself as the only merchant supplier delivering over $100 million in quarterly OCS shipments, while exploring emerging technologies like near-packaged optics (NPO).
Shares of Lumentum have risen 143% year-to-date, significantly outpacing the broader technology sector’s growth of 17.1%. The company’s current forward price-to-earnings ratio stands at 38.42, compared to the sector average of 20.76, indicating a robust market interest amidst intensifying competition.
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