5 Mid-Cap Stocks That Are On Fire Right Now

2. Lumentum Holdings Inc. (NASDAQ:LITE)

Year-to-Date Performance: 146.03%

Market Capitalization: $67.83 Billion

Number of Hedge Fund Holders: 97

Lumentum Holdings Inc. (NASDAQ:LITE) ranks among mid-cap stocks that are on fire right now. On May 1, Rothschild Redburn initiated coverage on Lumentum Holdings Inc. (NASDAQ:LITE), giving the stock a Buy rating and setting the price target at $1,270.

The research firm said that Lumentum Holdings Inc. (NASDAQ:LITE) core business focuses on manufacturing laser components and finished products, including optical transceivers. The core business is expected to grow as the company brings about 80% more capacity online over the next 18 months. Additionally, capacity expansion may also be made possible by a recent $2 billion investment from NVIDIA.

According to Rothschild Redburn, this expansion will help Lumentum Holdings Inc. (NASDAQ:LITE) accelerate a progressive mix shift towards higher-priced 200Gbps laser chips. The company aims to take advantage of the strong demand for Indium Phosphide lasers. CEO Michael Hurlston expects this trend to continue for the next five years.

The research firm also noted that the narrow linewidth of Lumentum Holdings Inc.’s (NASDAQ:LITE) lasers makes them well-suited for use with thermally sensitive micro-ring modulators, which are being used by NVIDIA in its co-packaged optics.

Lumentum Holdings Inc. (NASDAQ:LITE) designs and manufactures innovative optical and photonic products and technologies that power the networks and infrastructure behind AI, cloud computing, and next-generation communications.