Citi Remains a Buy on ​Lumentum Holdings Inc (LITE)

​Lumentum Holdings Inc. (NASDAQ:LITE) is one of the High-Flying Tech Stocks to Buy. On January 23, Papa Talla Sylla from Citi reiterated a Buy rating on the stock and raised the price target from $240 to $450. A day earlier, on January 22, Ruben Roy from Stifel Nicolaus also reiterated a Buy rating on Lumentum Holdings Inc. (NASDAQ:LITE) and raised the price target from $200 to $400.

​Ruben Roy of Stifel noted that the improved bullish outlook on the stock is based on the anticipation that agentic AI and reasoning networks will lead to a step-function increase in networking intensity. The increased shift towards AI and reasoning is expected to ramp up traffic complexity and scale over the coming years.

​Roy added that the shortening of cycle times for networking standards. These cycles have historically followed multi-year development cycles. However, Roy expects AI networking to scale linearly while compute performance grows quadratically. Therefore, the firm sees profitability gains and an expansion in valuation multiples for suppliers, including Lumentum Holdings Inc. (NASDAQ:LITE), which leverages IP advantages to fulfill complex technological requirements.

​That said, on January 20, Aletheia Capital also raised the price target on the stock from $330 to $500 and maintained a Buy rating. The firm noted that the improved outlook is based on the increasing demand for the company’s electro-absorption modulated lasers. The firm expects strong growth in EML volumes and 800Gbps switch bandwidth through 2028.

​Lumentum Holdings Inc. (NASDAQ:LITE) is a California-based technology company.

While we acknowledge the potential of LITE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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