New York, Feb 5, 2026, 10:42 EST — Regular session
- Lumentum climbed 0.7% in morning trading, bouncing around nearly 16% from its low to high for the day
- Quarterly results and forecasts from the company have brought optical circuit switches and co-packaged optics back into the spotlight
- Following the update, analysts raised price targets, fueling activity among momentum traders.
Lumentum Holdings Inc (LITE) saw choppy action Thursday morning, though the stock managed to hold onto a slight gain. By 10:37 a.m. EST, Lumentum was up 0.7% at $468.58, after swinging between $426.84 and $504. Roughly 3.5 million shares changed hands during that period.
The wide range highlights just how divided the trade has grown. Investors view the company as a barometer for AI data center demand, yet many jump to sell once the rally attracts too much attention.
On Tuesday, Lumentum posted fiscal Q2 revenue of $665.5 million and non-GAAP earnings of $1.67 per share. It forecast fiscal Q3 revenue between $780 million and $830 million, with non-GAAP earnings ranging from $2.15 to $2.35 a share. President and CEO Michael Hurlston highlighted strong demand for optical circuit switches — devices that route fiber connections within data centers — pushing backlog past $400 million. The company also secured an “incremental multi-hundred-million-dollar order” related to co-packaged optics, which integrates optics nearer to switching chips to reduce power use and enhance speed, slated for delivery in the first half of calendar 2027. Non-GAAP figures exclude items like stock-based compensation and other costs. (Lumentum Investor Relations)
During the earnings call, management said most of the optical circuit switch backlog should ship in the second half of 2026. They highlighted growing customer interest in 1.6-terabit transceivers, a faster type of data-center link. Hurlston also told analysts the company is exploring options to expand capacity, including potential acquisitions, to meet demand. (The Motley Fool)
After the update, analysts jumped on the stock. Rosenblatt hiked its price target to $580 from $380, Stifel bumped theirs up to $480 from $400, and B. Riley upgraded the stock to buy from neutral, boosting its target sharply to $526 from $147, Investing.com reported. (Investing)
Christopher Rolland of Susquehanna noted the quarter’s highlight wasn’t the earnings beat but the “dramatically better guidance” and a move toward higher margins. Lumentum’s shares surged over 10% Wednesday following the report, Investors.com said. (Investors)
A quarterly report submitted to the U.S. Securities and Exchange Commission on Feb. 4 covers the period ending Dec. 27, 2025. Traders will be looking closely for insights on the pace at which backlog turns into shipments as the company scales up production. (SEC)
The AI buildout is transforming the entire optical hardware sector, not only Lumentum. On Wednesday, Coherent, a key rival, reported that its datacenter and communications segment fueled its latest quarter, underscoring how closely the industry’s performance follows cloud investment. (Investing.com UK)
Still, the risks run both ways. A slowdown in hyperscale capital expenditures, hold-ups in customer deployments, or manufacturing snags might saddle Lumentum with excess inventory and squeezed margins, particularly as it pushes to ramp up new products quickly.
The next catalyst could arrive soon: Amazon is set to report earnings on Thursday, with investors watching closely for capex clues tied to demand for high-speed optics. For Lumentum, the key question remains whether it can meet its fiscal third-quarter guidance and convert backlog into revenue. (Kiplinger)
