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.
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. 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.
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This article is originally published at Insider Monkey.
