Lumentum Trades Near 52-Week High: Is the LITE Stock Still a Buy?

Lumentum Holdings LITE shares closed at $386.11 on Friday, which is close to the 52-week high of $401.60 it hit on Dec. 24, 2025. LITE shares have jumped a whopping 326.9% in a year, outperforming the Zacks Communication Components industry’s return of 111% and the broader Zacks Computer and Technology sector’s appreciation of 22.6%. This optical and photonic products provider’s impressive performance can be attributed to back-to-back quarters of impressive financial performance, favorable industry trends and strong fundamentals.Lumentum is riding on a strong portfolio to steer off competition from the likes of Coherent COHR, Ciena CIEN and Marvell Technology MRVL in the AI infrastructure space. Lumentum and Coherent are competitors in high-speed optical modules and transceivers used in data centres and optical links for AI infrastructures. Ciena is a leading provider of optical networking equipment, software and services. Marvell Technology is a competitor in optical networking for AI and data center applications.Lumentum has outperformed Ciena, Coherent and Marvell Technology in the past year. Shares of Ciena and Coherent have soared 191.2% and 92.5%, respectively, while Marvell Technology shares have dropped 24.9%.LITE Stock’s Performance Image Source: Zacks Investment Research The company’s strong portfolio is driving prospects, justifying a premium valuation, as suggested by a Value Score of F. In terms of the forward 12-month price-to-sales (P/S), LITE is trading at 9.18X, higher than the industry and peers. While the industry is trading at 3.85X, Ciena, Coherent and Marvell Technologies trade at 5.83X, 4.25X, and 7.68X, respectively.LITE Stock’s Valuation Image Source: Zacks Investment Research Technically, the stock is currently trading above the 50-day and the 200-day moving averages, indicating a bullish trend.LITE Stock Trades Above 50-Day & 200-Day SMAs Image Source: Zacks Investment Research Strong AI Demand to Boost LITE’s ProspectsLumentum’s prospects ride on strong AI demand that is driving the need for its laser chips and optical transceivers inside data centers, as well as in the interconnect and long-haul networks that bring them together. LITE estimates that more than 60% of its current revenues come from AI infrastructure and cloud, driven by strong demand from hyperscalers. Network equipment and optical transceiver manufacturers are also embedding Lumentum components in their solutions, which is driving top-line growth.LITE has evolved as a leading provider of optics for scaling AI. Cloud transceivers, optical circuit switches and co-packaged optics are long-term growth drivers for the systems segment. Lumentum expects sustainable growth from cloud transceivers (flat in the first quarter of 2026) over the next four to five quarters, beginning in the second quarter of fiscal 2026. Rapid manufacturing expansion in Thailand bodes well for cloud transceivers and optical circuit switches.The company expects roughly half of the sequential growth in the second quarter of fiscal 2026 to be driven by component products serving cloud applications. The other half is expected from LITE’s systems products serving cloud customers, driven by growing demand for high-speed optical transceivers for data center applications. Lumentum expects fiscal second-quarter revenues between $630 million and $670 million, while earnings are anticipated to be $1.30-$1.50 per share.Strong demand for laser chip, laser assembly and line subsystem product lines used in data centers, as well as for data center interconnect and long-haul applications, is driving the components business. LITE achieved record EML laser shipments due to strong sales of 100-gig line speeds and an increase in 200-gig shipments in the first quarter of fiscal 2026. LITE has started delivering CW lasers for 800-Gig transceiver manufacturers, which boosts its prospects.Laser chip shipment is anticipated to remain strong due to the expected addition of 40% more capacity over the next few quarters at the indium phosphide-based wafer fab. Laser chips carry a higher gross margin. Hence, higher shipments are expected to drive earnings. Lumentum currently expects 200-gig EMLs to account for 10% of the sales mix in early calendar 2026 and become a meaningful part of the mix as the year progresses.LITE’s Earnings Estimate Revision Shows Positive TrendThe Zacks Consensus Estimate for second-quarter fiscal 2026 earnings is pegged at $1.40 per share, up 21.7% over the past 60 days and indicating a mammoth rise from the 42 cents reported in the year-ago quarter. The consensus mark for second-quarter fiscal 2026 revenues is pegged at $652.4 million, suggesting a 62.2% surge from the year-ago quarter’s reported figure. Lumentum Holdings Inc. Price and Consensus Lumentum Holdings Inc. price-consensus-chart | Lumentum Holdings Inc. Quote The Zacks Consensus Estimate for third-quarter fiscal 2026 earnings is pegged at $1.52 per share, up 18.8% over the past 60 days and indicating a massive rise from the 57 cents reported in the year-ago quarter. The consensus mark for third-quarter fiscal 2026 revenues is pegged at $691.33 million, suggesting a 62.6% surge from the year-ago quarter’s reported figure.ConclusionLumentum’s growing AI infrastructure footprint bodes well for its prospects and justifies a premium valuation. The strong prospect makes the stock a must-have for growth-oriented investors. LITE currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ciena Corporation (CIEN): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report Coherent Corp. (COHR): Free Stock Analysis Report Lumentum Holdings Inc. (LITE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks