Lumentum (LITE) Soars 17% on PT Upgrade

We recently published 10 Stocks Stealing Wall Street Spotlight. Lumentum Holdings Inc. (NASDAQ:LITE) is one of the best-performing stocks on Monday.

Lumentum Holdings rallied for a second day on Monday, jumping 17.13 percent to close at $299.36 apiece as investor sentiment was boosted by an investment firm’s higher price target for its stock.

In a market note on Monday, Needham raised its price target for Lumentum Holdings Inc. (NASDAQ:LITE) to $290 from $235 previously, while maintaining its “buy” recommendation for the stock.

According to Needham, Lumentum Holdings Inc. (NASDAQ:LITE) stands to become a key supplier in the AI optical segment amid the strong demand for its products.

“Within its Datacom segment, EML chip production for the global XCVR market has been capacity-constrained and on allocation through CY25,” Needham said.

“Management has pointed to industry estimates for the high-speed (400G to 1.6T) XCVR market sustaining 30%+ CAGR from 2023 to 2028. Its acquired Cloud Light XCVR products are now shipping to all 3 hyperscaler customers, and LITE plans to eventually integrate its in-house CW lasers,” it added.

“We expect Lumentum will deliver improved results across top line, margins, income, and cash flow, and shares should continue to trend higher as major segments hit stride,” the investment firm said.

While we acknowledge the potential of LITE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.