New York, Jan 8, 2026, 13:58 EST — Regular session
- Lumentum shares drop about 11% in afternoon trade after touching near $400 earlier
- Needham’s Ryan Koontz raised his target to $470, calling Lumentum a 2026 “top pick”
- Traders eye Friday’s U.S. jobs report and Lumentum’s Feb. 3 results as the next tests
Lumentum Holdings Inc (LITE.O) shares slid 10.9% to $350.22 on Thursday, after topping $399.88 earlier in the session and then sinking as low as $343.41. More than 11 million shares had changed hands by early afternoon.
The move mattered because it snapped a sharp run that has turned the stock into a high-beta proxy for data-center buildouts. Lumentum jumped 11.3% on Tuesday to close at $397.42, a reminder of how fast money has been moving through the AI-linked optics trade. 1
The selloff was not just about one name. The Nasdaq-heavy QQQ ETF was down about 0.6% while the small-cap Russell 2000 proxy, IWM, was up about 1.1%, a split that often shows up when investors rotate away from pricey growth. Friday’s U.S. employment report is due at 8:30 a.m. EST, a release that can jolt rate expectations and, by extension, the kind of stocks that have run far, fast. 2
Needham raised its price target on Lumentum to $470 from $290 and kept a buy rating, according to reports. “We hate to sound repetitive, but LITE will remain our top pick again in 2026,” analyst Ryan Koontz wrote in a note cited by Seeking Alpha; Needham pointed to optical circuit switching and co-packaged optics (putting optical links next to chips to cut power and latency) as potential growth drivers. 3
Lumentum fell with the pack. Coherent dropped 8.6%, Ciena slid 14.0% and Applied Optoelectronics shed 14.0% in the same session.
Lumentum makes optical and photonic parts used in telecom and data-center networks and sells industrial lasers used in manufacturing. Those end-markets have tied the stock’s day-to-day trading more closely to cloud and AI-capex signals than it used to be. 4
The company said it will release fiscal second-quarter 2026 results on Feb. 3 after the market closes and hold a webcast at 5:00 p.m. ET. Investors will be listening for what management says about demand in data-center interconnect and other high-speed optical links that sit in the “plumbing” of AI clusters.
Options traders are already pricing in big swings into that report. Lumentum’s 30-day options-implied volatility — a gauge taken from option prices — was 109.15% on Jan. 6, according to Fintel. 5
But the setup cuts both ways. If February results or guidance fail to justify the recent re-rating tied to AI networking spend, the stock can fall quickly, especially in a tape that turns sensitive to rates and macro data.
