New York, Feb 24, 2026, 17:44 (EST) — After-hours
- Lumentum finished the session 2.0% higher, with shares tacking on a bit more after the bell.
- Morgan Stanley bumped up its price target on Lumentum to $520, up from $420, while sticking with an Equal-Weight rating.
- Attention shifts to Lumentum’s appearances at conferences in late February and early March, as investors hunt for new signs of demand.
Lumentum Holdings Inc. finished Tuesday’s session 2.0% higher at $688.27, a new 52-week peak for the stock. After-hours moves saw shares edge up again. (StockAnalysis)
The shares climbed after Morgan Stanley bumped its price target up to $520 from $420 in a Monday note, sticking with an Equal-Weight rating. The catch: that new target actually lands below where the stock finished Tuesday. Analyst Meta Marshall pointed to “optical markets are set to grow to $65B-plus by 2028 from about $30B in 2025,” attributing the jump to ramped-up networking speeds and AI data-center buildout. (TipRanks)
The spread between the current share price and the new target highlights how investors are piling into AI hardware plays—stocks linked to data-center expansion keep climbing, while analysts scramble to adjust their forecasts, often after the move. For Lumentum, it’s less about whether demand is on the mend, and more about whether upcoming updates will support the stock’s latest levels.
Lumentum makes optical and photonic equipment for data transmission and supplies commercial lasers used in manufacturing and other sectors. Bulls argue that as AI computing clusters get bigger and energy bills climb, data centers will have to ramp up to faster, more compact network connections.
Earlier this month, in the latest earnings update, CEO Michael Hurlston called Lumentum “only at the starting line” for both optical circuit switches and co-packaged optics—two technologies set to relieve big data center congestion by moving more traffic onto optical links. The company pointed to an optical circuit switch backlog “well beyond $400 million” and highlighted a fresh “incremental multi-hundred-million-dollar” order for co-packaged optics, expected for delivery in the first half of calendar 2027. For the fiscal third quarter, Lumentum forecast revenue between $780 million and $830 million. (Lumentum Investor Relations)
Trading was uneven among peers late Tuesday. Coherent barely budged. Ciena tacked on some gains. Marvell and Broadcom, though, slipped.
But there’s a flip side to this surge. Morgan Stanley’s new target now lags well behind the current share price, so if AI order momentum stalls—or production schedules slip—sentiment could take a hit in a hurry.
Lumentum execs are set to address demand trends and delivery schedules when they speak to investors at the Susquehanna technology conference Feb. 26, then again at Morgan Stanley’s Technology, Media & Telecom gathering on March 2. (Lumentum Investor Relations)
