Lumentum Holdings Inc. (LITE): A Bull Case Theory 

We came across a bullish thesis on Lumentum Holdings Inc. on Bullseye Investing’s Substack. In this article, we will summarize the bulls’ thesis on LITE. Lumentum Holdings Inc.’s share was trading at $149.61 as of October 10th. LITE’s trailing and forward P/E were 458.78 and 33.90 respectively according to Yahoo Finance.

Lumentum Holdings ($LITE) is a U.S.-based technology company specializing in optical and photonic products for telecommunications, data communications, and industrial applications, including components for LiDAR in autonomous vehicles and VCSEL technology for 3D sensing in smartphones. Its products are critical for high-speed data transmission, AI-driven data centers, and robotics, positioning the company to capitalize on macro trends such as AI, cloud computing, and autonomous vehicles. Lumentum holds roughly 15% of the optical communications market and a leading 42% share in VCSELs, primarily through its partnership with Apple, giving it a defensible but concentrated competitive position.

The company experienced a cyclical earnings downturn in 2024–2025 due to inventory corrections, customer concentration, and export restrictions, causing EPS to drop from $1.69 to $0.06, highlighting the risks of its volatile market. Despite this, Lumentum has begun a turnaround, fueled by the acquisition of Cloud Light and a shift toward high-growth 400G/800G optical transceivers for AI data centers, which now represent the bulk of its revenue. Guidance for 2027 points to an average quarterly EPS of $1.62, with potential stock appreciation under various scenarios ranging from 25% in a bear case to more than 85% in a bull case.

While Lumentum remains exposed to cyclical and regulatory risks, its role in the expanding AI and data center ecosystem, combined with its leadership in VCSEL and coherent optical technology, provides a compelling growth opportunity. With a recent stock recovery and strong forward-looking fundamentals, Lumentum presents a high-risk, high-reward investment opportunity for those seeking exposure to the optical components driving next-generation data and automation technologies.

Previously we covered a bullish thesis on Wolfspeed, Inc. (WOLF) by Moist-Clerk in October 2024, which highlighted the company’s leadership in silicon carbide and gallium nitride technologies, its focus on EV and renewable energy markets, and production expansion at the Mohawk Valley Fab. The stock has appreciated approximately 91.85% since coverage. Bullseye Investing shares a similar perspective but emphasizes Lumentum Holdings’ leadership in optical technologies, AI and data center exposure, and post-downturn recovery, highlighting another high-growth opportunity in a different tech segment.

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Disclosure: None.