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The AI Boom Is Creating a Significant Opportunity for Lumentum
Posted On Aug 12, 2026 by Ian Cooper
Since the start of 2026, shares of Lumentum Holdings (NASDAQ: LITE) have had a significant year, rallying from about $400 to more than $1,085. Now back to $820.59, it’s still an attractive opportunity.
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Fueling the latest round of momentum, the company, which makes technology that moves data quickly, reported much better-than-expected results. That’s because AI requires significant amounts of computing power. Companies such as NVIDIA are building powerful computer systems that can handle AI workloads. But there is another important piece of the puzzle: those computers need to move large amounts of data between each other.
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Lumentum makes optical and photonic products that help move data using light, which is becoming increasingly important as AI data centers get larger and more powerful. Considering that AI needs faster ways to move data, optical networking can provide that speed.
All of which benefits stocks like Lumentum.
In fact, Lumentum’s latest results show how much demand is growing. The company reported adjusted earnings of $3.23 per share for its fiscal fourth quarter. That was much higher than the 88 cents per share it reported a year earlier. It also beat Wall Street’s expectations. Analysts were expecting earnings of about $2.97 per share.
The company also reported $1.01 billion in revenue, up 109% from the same period last year. Analysts had expected about $988 million. The company also became more profitable. Its adjusted operating margin increased to 36.6%, compared with 32.2% in the previous quarter and 15% a year ago.
The goal is to help speed up the development and use of advanced optical technology.
In addition, NVIDIA CEO Jensen Huang has said that NVIDIA and Lumentum are working together on advanced silicon photonics technology. The goal is to help build the next generation of massive AI data centers. This is a big deal because NVIDIA is one of the most important companies in the AI industry. As NVIDIA sells more powerful AI chips, customers also need better networking technology to connect those chips.
The Optical Networking Market Could Explode
The potential market for optical networking is substantial.
Goldman Sachs (NYSE: GS) estimates that the total market could grow from about $15 billion in 2026 to nearly $154 billion by 2028. That would be a massive increase in just two years.
The reason is the rapid growth of AI.
AI companies are building data centers with thousands of GPUs. These chips need to communicate with each other extremely quickly. Traditional copper cables may not be able to handle the amount of data these systems need to move. Optical connections can help solve that problem by using light to transmit information.
What This Means for Investors
Lumentum is becoming an important part of the AI infrastructure story. Most investors think about AI and immediately think of companies making AI chips or software. But AI also needs the equipment that connects all those computers. That equipment is becoming increasingly important as AI data centers grow.
Lumentum is one company that should continue to benefit from this trend. Its latest earnings were strong; revenue more than doubled from a year ago, and its partnership with NVIDIA gives the company an important connection to the AI industry. Plus, the optical networking market could also become much larger over the next few years.
With LITE, the picture is clear: AI needs fast data connections, and Lumentum is helping provide them. If AI spending continues to grow, demand for optical networking could grow with it. That could make Lumentum an important company to watch as the AI boom continues.
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CoreWeave Jumps After Q2 Earnings Beat and Bullish Analyst Upgrades
Posted On Aug 12, 2026 by Ian Cooper
CoreWeave (NASDAQ: CRWV) had a strong second quarter, beating Wall Street’s expectations and giving investors more confidence in the company’s future. That would explain why the stock was up more than 18% in pre-market.
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The AI cloud computing company reported an adjusted loss of $1.03 per share. That was better than the $1.20 loss analysts expected. Revenue was also slightly better than expected. CoreWeave brought in $2.58 billion during the quarter, up 112% from a year earlier. Analysts had expected revenue of about $2.56 billion.
The company also gave investors another reason to be optimistic: its huge backlog of future business. CoreWeave said it had $104 billion in revenue backlog at the end of the quarter.
The AI cloud computing company is also continuing to expand its data centers. By the end of June, the company had 1.5 gigawatts of active power capacity across its data centers. Its total contracted power capacity reached 4.2 gigawatts in early August, up from 3.5 gigawatts previously.
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Several Wall Street analysts were bullish on the earnings report and raised price targets.
Deutsche Bank (NYSE: DB) kept a Buy rating and a $150 price target. The bank said CRWV showed strong execution, growing demand, and improving profitability. It also pointed to the company’s growing backlog and expanding data center capacity.
JPMorgan (NYSE: JPM) was more cautious. The bank kept its Neutral rating but raised its price target from $110 to $120. Analysts said the biggest positive from the quarter was CoreWeave’s improving margins. Citi (NYSE: C) was more bullish, keeping its Buy rating and $142 price target. The bank said AI demand remains strong and that CRWV is gaining pricing power. The company has raised prices by about 25% across some of its services.
Even Bernstein, which remains bearish on the stock, admitted that the quarter was CRWV’s strongest performance so far. The firm raised its price target from $67 to $74 but kept an Underperform rating.
Bernstein said CoreWeave’s backlog is growing, its power capacity is increasing and its customer base is slowly becoming more diverse. However, the firm still does not believe these improvements are enough to change its long-term view of the stock.
Bank of America (NYSE: BAC) kept its Buy rating and $140 price target. The bank expects CRWV’s margins to improve during the second half of the year as newly activated data center capacity starts producing more revenue.
Wells Fargo (NYSE: WFC) was even more optimistic. It raised its price target from $155 to $160 and kept an Overweight rating. The bank said CoreWeave’s margin story is becoming clearer. The company reported contribution margins of around 30% to 35% during the second quarter, compared with the mid-20% range previously.
Some Investors Are Still Worried
Morgan Stanley (NYSE: MS) remains cautious, keeping an Equal Weight rating and a $99 price target. The bank said demand and pricing trends look positive but that it remains concerned about CoreWeave’s long-term returns and execution.
Barclays (NYSE: BCS) also maintained an Equal Weight rating with a $90 price target, although it said the company’s latest results showed strong operating improvement.
What’s Next for CoreWeave
CRWV’s second-quarter results were clearly better than many investors expected. Revenue is growing, the company has a significant backlog of future business, and its margins appear to be improving. Strong demand for AI computing is also allowing CoreWeave to raise prices. However, the company still faces major challenges, including high debt, heavy spending, and growing competition.
That explains why Wall Street remains divided. Some analysts believe CoreWeave is becoming a major winner from the AI boom, while others think investors are overlooking the risks. For now, the latest earnings report gives the bulls more evidence that CoreWeave can turn the huge demand for AI computing into a profitable business. The next challenge will be proving that this growth can continue.
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