Lumentum(US:LITE) Yahoo Finance·2025-12-31 16:25Core Viewpoint - Lumentum Holdings Inc. is experiencing significant upward revisions in price targets from major financial institutions due to strong demand for optical components and transceivers, although there are concerns about stretched valuations impacting future growth potential [1][2][3]. Group 1: Price Target Adjustments - Morgan Stanley raised Lumentum's price target to $304 from $190, maintaining an Equal Weight rating, citing a broadening focus from chips to infrastructure, particularly optical [1]. - Bank of America increased its price target to $375 from $210 with a Neutral rating, driven by exceptional demand for optical components and transceivers, indicating that orders are outpacing supply [2]. - JPMorgan raised its price target to $350 from $235 while keeping an Overweight rating, highlighting growth drivers such as scale-across and multi-rail opportunities in optical networking [3]. Group 2: Market Dynamics and Growth Drivers - The demand for optical components is expected to remain strong through mid-2026, supported by AI investment trends and telecom innovations [1][3]. - JPMorgan's analysis suggests that the current high growth rates for Lumentum may be sustained longer than previously anticipated, leading to a higher earnings multiple applied to the stock [4]. - Lumentum operates in two segments: Cloud & Networking and Industrial Tech, manufacturing and selling optical and photonic products across various global regions [4].