Lumentum (LITE) Soars 10.18% on 29% Price Target Hike

Lumentum Holdings Inc. (NASDAQ:LITE) is one of the 10 Stocks Dominating Today’s Market Action.

Lumentum Holdings extended its winning streak to a fifth straight session on Thursday, jumping 10.18 percent to close at $772.13 apiece, as investors took heart from Bank of America’s (BofA) price target rating and optimistic outlook for the AI optics market, saying that the total addressable market could hit $90 billion over the next four years.

In a market note, BofA raised its price target for Lumentum Holdings Inc. (NASDAQ:LITE) by 29 percent to $775 from $600 previously, following the latter’s comments that it expects the market to grow at a compounded annual growth rate (CAGR) of 40 percent from last year’s $18 billion.

Lumentum Holdings Inc. (NASDAQ:LITE) said that the expansion is expected to be supported by pluggables, lasers, co-packaged optics, optical circuit switches, and data center interconnects, among others.

Lumentum (LITE) Soars 10.18% on 29% Price Target Hike

Analyst upgrades aside, the rally can also be attributed to continued portfolio positioning, ahead of Lumentum Holdings Inc.’s (NASDAQ:LITE) official inclusion in the S&P 500 index effective Monday, March 23.

Listed companies typically experience significant movements in their share prices during index rebalancing activities, as funds and institutional investors would need to reposition their portfolios to mirror the composition of the index being tracked before the effective date.

Its inclusion in the S&P 500 marks a significant milestone and promotion, after being a previous component of the S&P MidCap 400.

While we acknowledge the risk and potential of LITE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LITE and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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