New York, April 9, 2026, 12:15 EDT
JPMorgan bumped its price target on Lumentum to $950 from $565, pushing the stock higher again Thursday. That move came right after Mizuho’s own hike to $930 from $750. Lumentum reached $959.57 in intraday trading and hovered around $899.39, up roughly 0.4% by late morning in New York. Shares already surged 9.8% Wednesday.
Back-to-back calls are drawing attention. Lumentum supplies lasers and optical gear that shuttle data between AI chips—a segment Nvidia is now putting money behind, locking in purchase deals. CPO, which stands for co-packaged optics, brings optics right up close to the chip package to cut electrical loss. Optical switching, on the other hand, routes traffic inside sprawling AI clusters with lower power requirements.
Last month, Nvidia said it would pour $2 billion into Lumentum, also locking in multibillion-dollar orders—a move that helps Lumentum boost its manufacturing plans. Not long after, Lumentum announced plans for a 240,000-square-foot laser facility set for Greensboro, North Carolina. Nvidia’s on board as a customer, with production at the site aiming to pick up speed by mid-2028.
Nvidia’s Jensen Huang calls AI “the largest computing infrastructure buildout in history.” Lumentum chief Michael Hurlston says the new fab will “increase capacity and accelerate innovation.” NVIDIA Investor Relations
Lumentum posted revenue of $665.5 million on February 3, a jump of 65.5% from the prior year, with non-GAAP earnings landing at $1.67 per share. For the third quarter, the company is projecting revenue in the $780 million to $830 million range and expects adjusted earnings between $2.15 and $2.35 per share.
Hurlston described Lumentum as just getting started in optical circuit switches and CPO. The optical-switch backlog, he noted, has topped $400 million. And there’s already another multi-hundred-million-dollar CPO order on the books—this one set for delivery in the first half of 2027.
Wall Street’s getting more bullish on that story. Mizuho pointed to the company’s investor-day pitch as the reason for hiking its target. JPMorgan’s Samik Chatterjee cited better forward visibility, recent customer deals, and increased capacity as the key factors behind his higher call.
Lumentum isn’t alone—AI-networking vendors are scrambling. Nvidia inked a $2 billion agreement with Coherent, mirroring the size of the Lumentum deal, and Marvell scooped up photonics startup Celestial AI last year. Optical interconnects have become the new battleground for chipmakers.
Lumentum plans to hand out approximately 5.7 million shares to holders of about $474.6 million in convertible notes due 2026 and 2029, according to an SEC filing this week. No cash changes hands in the deal; the note balances shrink, while dilution ticks up by around 0.6 million shares.
Here’s the sticking point: adoption hasn’t yet closed the gap with the narrative. Back in March, Reuters flagged that CPO production was still lagging behind Nvidia’s chip volumes. Jacob Bourne, an eMarketer analyst, pointed out that getting the tech “affordable enough to deploy at scale” remains the big challenge. The note swap, for its part, brings dilution into the mix. Reuters
Lumentum plans to release its fiscal third-quarter numbers after markets shut on May 5, the company said April 6.
