JPMorgan Points Out Lumentum Holdings’ (LITE) “Scale-Across” and “Multi-Rail” Opportunities

Lumentum Holdings Inc. (NASDAQ:LITE) is one of the high short interest stocks to buy right now. On December 5, JPMorgan analyst Samik Chatterjee raised the firm’s price target on Lumentum to $350 from $235, while keeping an Overweight rating on the shares. This sentiment was posted as JPMorgan broadly increased its financial estimates for optical companies, citing new opportunities in scale-across and multi-rail. The firm explained that the extra market potential from scale-across and the new telecom products supporting multi-rail infrastructure in long-haul and metro networks create a stronger outlook.

Earlier, for FQ1 2026, Lumentum Holdings announced the highest quarterly revenue in the company’s history. Total revenue reached $533.8 million, which marked a 58% year-over-year increase. AI and cloud infrastructure account for over 60% of its revenue. Segment revenue breakdown showed components revenue at $379.2 million, growing 18% sequentially and 64% year-over-year. Systems revenue was $154.6 million, which declined 4% sequentially but was still up 47% year-over-year.

JPMorgan Points Out Lumentum Holdings' (LITE) "Scale-Across" and "Multi-Rail" Opportunities

However, despite the growth, Lumentum faces a supply-demand imbalance, with demand outstripping supply by 25% to 30%. The company is allocating supply and using this imbalance to implement targeted price increases, with broader pricing adjustments anticipated in 2026. For FQ2, Lumentum expects total revenue between $630 and $670 million. The company also expressed increased confidence in the Optical Circuit Switch market, aiming to reach $100 million in quarterly revenue by December 2026.

Lumentum Holdings Inc. (NASDAQ:LITE) manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. It operates through two segments: Cloud & Networking and Industrial Tech.

While we acknowledge the potential of LITE to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LITE and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.