Why Lumentum (LITE) Made the Best Performing AI Stocks List

Lumentum Holdings Inc. (NASDAQ:LITE) is one of the 10 Best Performing AI Stocks to Buy. On April 10, Aletheia Capital raised its price target on Lumentum Holdings Inc. (NASDAQ:LITE) from $500 to $1,225 and kept its Buy rating on the stock.

The research firm pointed out that the large increase in the price target reflects significant upgrades to its earnings per share forecasts. Aletheia Capital now expects the company’s earnings per share to grow four times between fiscal years 2026 and 2028. This growth is expected to come from revenue expanding by 2.5 to 3 times and a 15 percentage point improvement in margins over the same period.

Why Lumentum (LITE) Made the Best Performing AI Stocks List

Aletheia Capital pointed to three structural tailwinds supporting this strong outlook. First, demand for EML lasers is stronger than expected, with a compound annual growth rate of 75% to 80% supported by the rapid migration to 200Gbps diodes, which is doubling content value. Second, Lumentum Holdings Inc. (NASDAQ:LITE) is continuing to gain market share and currently holds about 90% share in the 200Gbps segment. Third, sales of OCS are expected to see significant growth in fiscal years 2026 through 2027.

Aletheia Capital noted that Lumentum Holdings Inc. (NASDAQ:LITE) is one of the fastest-growing stocks in the AI supply chain and the firm continues to include the stock in its Alpha Portfolio.

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.

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.

READ NEXT: 10 Best Performing Blue Chip Stocks to Buy and 10 Best Performing Stocks of Q1 2026 to Watch for Q2.

Disclosure: None.  Follow Insider Monkey on Google News.