New York, January 9, 2026, 17:31 EST — After-hours
- Lumentum wrapped the week in a volatile fashion, as traders responded to new analyst notes focused on AI data-center networking.
- Needham raised its target to $470, while Mizuho also increased its price target and highlighted the stock as a beneficiary of AI-related capital spending.
- The next major event is the company’s earnings update and call set for Feb. 3.
Lumentum Holdings Inc (LITE.O) bounced between $333 and $363 on Friday before settling up 0.9% at $351.42. In after-hours, the stock dipped roughly 0.4% to about $350, following Needham’s boost of its price target from $290 to $470, and a day after shares dropped 11.4%. 1
The tug-of-war is familiar now. Investors are eager to get a piece of the “pipes and picks” powering the AI buildout, and optical components remain a top target.
Lumentum manufactures lasers and photonics components that shuttle data within and between large data centers. The real question is whether 2026 budgets will translate into orders quickly enough to meet current forecasts.
Mizuho analysts forecast a 32% jump in AI-related capital spending by major U.S. tech firms this year, pushing the total to $540 billion. They’ve also lifted their price target for Lumentum to $455 from $325. “We see Lumentum remaining well positioned as AI data centers transition from Copper to Optical [networking],” said Mizuho’s Vijay Rakesh, highlighting demand driven by Nvidia systems and Google’s expansion of its data-center network. 2
Needham took a similar stance, saying optical spending linked to AI networking is still in its early days. It pointed to optical circuit switching and “scale-across” links as growth opportunities in the near term, with co-packaged optics (CPO) expected to drive growth further down the road. The firm also highlighted Lumentum’s lead in indium phosphide (InP) laser fabrication — a compound semiconductor technique used for high-performance data-center lasers — as a competitive advantage. 3
The backdrop was favorable. The Nasdaq-100 tracking Invesco QQQ Trust gained 1% on Friday, while the SPDR S&P 500 ETF added 0.6%. Coherent rose 2.8%, Ciena increased 2.5%, and Credo Technology surged 6.2%.
The downside is straightforward. Should major cloud customers slow their orders, pressure suppliers on prices, or delay new network builds, the optics boost could slip by a quarter or two. The stock’s recent swings highlight how fast positions can unravel.
Mark your calendars: Lumentum will hold its fiscal second-quarter earnings call on Feb. 3 at 5 p.m. ET. Investors are eager for details on AI-driven demand in its components segment, the direction of margins, and the pace at which new optical products begin contributing to revenue. 4
