Lumentum Holdings Inc. research snapshot
LITE AI stock analysis reads Lumentum Holdings Inc. as a high-momentum optical and photonic supplier tied to AI data center connectivity, cloud networks, co-packaged optics, optical circuit switches, and industrial lasers. At the August 2, 2026 data cutoff, LITE closed at $713.94 on July 31, 2026 with a market capitalization near $55.54 billion, about 34% below its 52-week high near $1,085.68. The company reported record fiscal Q3 2026 revenue of $808.4 million, up 90.1% year over year, with GAAP operating margin of 21.6%, non-GAAP operating margin of 32.2%, and non-GAAP diluted EPS of $2.37, and it guided fiscal Q4 2026 revenue to $960 million to $1.01 billion with non-GAAP operating margin of 35.0% to 36.0%. The stock still trades near 135.7x trailing EPS, 44.7x forward EPS, and about 487x trailing free cash flow, with short interest near 11.3% of shares outstanding, so this page uses scenario ranges rather than a certain price prediction. This is informational research and not investment advice.
Current price
$713.94
Market cap
$55.54 billion
AI score
68 / 100
Rating
AI optical demand leader, valuation risk high
Trend status
Below the 20-day, 50-day, and 100-day moving averages, above the 200-day moving average, with neutral momentum after a pullback
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Lumentum sells optical and photonic chips, components, modules, subsystems, lasers, and related systems used by cloud, AI infrastructure, network equipment, telecom, industrial, and sensing customers, with TTM revenue near $2.49 billion. | High |
| Moat | Moat comes from photonics know-how, laser chip process capability, EML and pump laser leadership, customer qualification cycles, five indium phosphide fabs, MEMS optical circuit switch technology, and deep relationships with cloud and network equipment buyers. | Medium-high |
| Management | CEO Michael Hurlston has shifted the company toward AI data center growth and component-focused strategy, and Q3 fiscal 2026 delivered record revenue, record margins, and a strong Q4 guide. Execution now depends on scaling capacity while managing dilution, substrates, and customer concentration. | Medium-high |
| Financial trend | Fiscal Q3 2026 revenue rose 90.1% year over year to $808.4 million, GAAP operating margin reached 21.6%, non-GAAP operating margin reached 32.2%, and fiscal Q4 2026 guidance points to $960 million to $1.01 billion in revenue. | High |
| Valuation | At $713.94, LITE traded near 135.7x trailing EPS, 44.7x forward EPS, 22.3x sales, and about 487x free cash flow, so expectations are demanding even after a pullback from the highs. | High |
| Technical trend | The stock was below its 20-day average near $745, its 50-day average near $826, and its 100-day average near $828, but above its 200-day average near $601, with RSI near 45.5 after a sharp correction from the 52-week high. | Medium-high |
| Risk level | Risk is high because LITE depends on fast AI optical order growth, capacity and substrate execution, pricing strength, customer spending plans, and a valuation multiple that can compress quickly, while free cash flow remains thin and short interest is elevated. | Medium-high |
| AI confidence | High for descriptive facts and math that matched across StockAnalysis, the Q3 fiscal 2026 earnings release, the earnings call transcript, and the June 2026 Mizuho conference transcript. Medium for future returns because order timing, supply scale, dilution, and multiple changes are uncertain. | High data confidence |
| Investment certainty | Medium-low certainty. LITE is a credible AI optical beneficiary, but this page provides a research framework, not a buy or sell instruction. | Medium-low |
LITE AI stock forecast
The LITE AI stock forecast uses scenario math around the July 31, 2026 close of $713.94 and the consensus fiscal 2027 non-GAAP EPS estimate of $18.35. A three-year framework applying EPS growth of 0%, 10%, and 25% with exit multiples of 24x, 38x, and 55x produced a bearish value near $440, a base value near $930, and a bullish value near $1,970. These are scenarios, not price commitments.
$1,700 to $2,100
More likely if AI data center optical demand stays supply constrained, fiscal Q4 2026 guidance is met or exceeded, optical circuit switches and co-packaged optics ramp cleanly, margins hold above prior cycles, EPS compounds near 25% per year, and investors keep applying a premium AI optical multiple.
$800 to $1,050
More likely if revenue keeps growing but normalizes after the current AI buildout surge, EPS compounds from a higher base at a high single digit to low double digit rate, and the market moves LITE toward a lower but still premium optical networking multiple.
$350 to $500
More likely if hyperscaler orders pause, new capacity arrives late, substrate supply tightens, pricing weakens, competition takes share, free cash flow remains thin, preferred-stock dilution weighs on common holders, or AI hardware multiples contract.
LITE AI technical analysis
LITE AI technical analysis is mixed as of the August 2, 2026 data cutoff. The stock closed near $713.94 on July 31, 2026, below its 20-day moving average near $745, its 50-day moving average near $826, and its 100-day moving average near $828, but above its 200-day moving average near $601, with 14-day RSI near 45.5, 14-day ADX near 12, and beta of 1.48.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $713.94 | July 31, 2026 closing price from StockAnalysis, used for this static page. |
| Near support | $690 to $705 | This band contains the July 31 intraday low near $691 and the recent consolidation area, so it is the first demand zone to monitor. |
| Secondary support | $595 to $610 | The 200-day moving average near $601.15 is the key longer-term trend reference. |
| Near resistance | $740 to $755 | The 20-day moving average near $745.09 is the first overhead level after the pullback. |
| Major resistance | $820 to $835 | The 50-day moving average near $826.15 and the 100-day moving average near $828.32 cluster overhead, and LITE would need to reclaim this zone to repair the intermediate trend. |
| 52-week high | $1,085.68 | The stock is roughly 34% below this June 2026 high, which marks the next structural target if the trend turns. |
| Momentum | RSI near 45.5, ADX near 12 | RSI is neutral after the correction and ADX is low, meaning the stock is choppy rather than strongly trending in either direction. |
| Volume | 20-day average about 4.32 million shares | High average volume means failed rebounds can move quickly, especially in AI hardware names with crowded positioning. |
| Volatility | Beta 1.48, ATR about $76 | 14-day ATR was near $75.8 and 14-day historical volatility near 114%, so position sizing should reflect very large daily swings. |
| Invalidation | Close below $690, then $601 | A close below $690 would weaken the short-term setup. A break below the 200-day average near $601 would challenge the longer-term AI optical trend. |
LITE AI trading strategy
The LITE AI trading strategy is a rules-based framework for an AI optical stock with strong revenue acceleration and high valuation risk. It is not personalized advice and should be paired with live chart data, the August 11, 2026 earnings date, filings, position sizing, and a defined invalidation level.
Watch for LITE to hold the $690 to $705 area, reclaim the 20-day moving average near $745, and then rebuild above the 50-day average near $826 with improving volume, while the 200-day average near $601 keeps rising.
A close below $690 or another failed recovery after the August 11 earnings report should invalidate the short-term trend setup.
If LITE pulls toward the $595 to $610 area or the $690 to $705 zone without a thesis break, compare the price move with Q4 fiscal 2026 results and guidance, gross margin, non-GAAP operating margin, AI optical demand, capacity commentary, and customer mix.
Do not average down without a maximum loss rule because high-multiple AI hardware stocks can reset fast when order expectations slow.
Track Cloud and Networking revenue, Components versus Systems revenue, non-GAAP operating margin, free cash flow, debt, cash, preferred-stock dilution, major cloud customer demand, optical circuit switches, co-packaged optics, near-packaged optics, and indium phosphide substrate supply.
Reduce confidence if revenue growth depends on too few customers, capacity or substrate ramps slip, free cash flow lags earnings, or AI optical pricing starts to normalize.
Investment research summary
Lumentum gets paid because AI data centers, cloud platforms, telecom networks, network equipment makers, and industrial customers need optical and photonic parts that move data, sense the environment, and deliver laser-based functionality at scale.
The moat is built from photonics engineering depth, laser chip process know-how, qualification cycles, customer trust, five manufacturing fabs, and a portfolio that spans components and systems.
The thesis fails if AI optical demand proves cyclical, customers pause after inventory builds, capacity or substrate supply misses timing, competitors close the gap, free cash flow disappoints, preferred-stock dilution hurts common holders, or the market stops paying extreme multiples for AI hardware suppliers.
Michael Hurlston is pushing the company toward AI cloud growth and margin expansion. The key management test is whether Lumentum can scale supply and earnings without creating excessive dilution, debt risk, or customer concentration.
Lumentum sits inside a long-duration shift toward AI data center bandwidth, high-speed optical interconnects, co-packaged optics, near-packaged optics, optical circuit switching, and more energy-efficient cloud network infrastructure.
The current price implies that AI optical growth, premium margins, and customer demand remain strong for years. Margin of safety is limited unless EPS compounds quickly enough to offset future multiple compression, especially after a roughly 34% drawdown from the highs.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| LITE price | $713.94 at the July 31, 2026 close | StockAnalysis quote and statistics page | July 31, 2026 |
| Market capitalization | $55.54 billion, verified as $713.94 x 77.80 million shares with 0.01% deviation | financial_rigor.py market cap verification and StockAnalysis | August 2, 2026 |
| Q3 fiscal 2026 revenue | $808.4 million, up 90.1% from Q3 fiscal 2025 and up 21.5% sequentially | Lumentum Q3 fiscal 2026 financial results | May 5, 2026 |
| Q3 fiscal 2026 margins | GAAP gross margin 44.2%, GAAP operating margin 21.6%, non-GAAP gross margin 47.9%, non-GAAP operating margin 32.2% | Lumentum Q3 fiscal 2026 financial results | May 5, 2026 |
| Q3 fiscal 2026 EPS | $1.50 GAAP diluted EPS and $2.37 non-GAAP diluted EPS, with non-GAAP net income of $225.7 million | Lumentum Q3 fiscal 2026 financial results | May 5, 2026 |
| Fiscal Q4 2026 outlook | $960 million to $1.01 billion revenue, 35.0% to 36.0% non-GAAP operating margin, and $2.85 to $3.05 non-GAAP diluted EPS | Lumentum Q3 fiscal 2026 business outlook | May 5, 2026 |
| Revenue mix | Q3 fiscal 2026 Components revenue of $533.3 million (66.0%) and Systems revenue of $275.1 million (34.0%) | Lumentum Q3 fiscal 2026 product type table | May 5, 2026 |
| FY2025 revenue | $1.645 billion, cross-checked against StockAnalysis, the income statement, and the forecast table with under 0.2% deviation | Lumentum FY2025 release and financial_rigor.py cross-check | August 2, 2026 |
| FY2025 net income | $25.9 million, cross-checked against StockAnalysis and the FY2025 release | Lumentum FY2025 release and financial_rigor.py cross-check | August 2, 2026 |
| Cash and short-term investments | $3,172.3 million at March 28, 2026, up $2,017.0 million from the fiscal Q2 2026 quarter mainly due to the Series A Convertible Preferred issuance tied to NVIDIA | Lumentum Q3 fiscal 2026 balance sheet and earnings call | May 5, 2026 |
| Total debt and net cash | Total debt near $3,314 million, including the current portion of long-term debt of $3,238.6 million, with net cash of -$141.4 million | StockAnalysis balance sheet and financial_rigor.py | August 2, 2026 |
| TTM income statement | Revenue $2,488 million, gross margin 40.84%, operating income $237.1 million, net income $439.9 million, diluted EPS $5.40 | StockAnalysis income statement | August 2, 2026 |
| TTM cash flow | Operating cash flow $452.4 million, capital expenditures $338.4 million, free cash flow $114.0 million | StockAnalysis cash flow statement | August 2, 2026 |
| Valuation ratios | 135.73x trailing PE, 44.71x forward PE, 22.32x sales, 17.22x book, 487.23x free cash flow, EV/EBITDA 113.27x | StockAnalysis statistics and financial_rigor.py valuation check | August 2, 2026 |
| Consensus financial forecast | Fiscal 2026 revenue $2.99 billion with non-GAAP EPS $8.23, fiscal 2027 revenue $5.61 billion with non-GAAP EPS $18.35 | StockAnalysis forecast financial forecast | July 22, 2026 |
| Analyst snapshot | 25 analysts, Buy consensus, average price target $1,105, low $600, median $1,100, high $1,400 | StockAnalysis forecast page | July 22, 2026 |
| Analyst rating mix, July 2026 | 16 Strong Buy, 5 Buy, 4 Hold, 0 Sell out of 25 analysts | StockAnalysis forecast recommendation trends | July 22, 2026 |
| Recent analyst target updates | J.P. Morgan Buy $1,165, Barclays upgraded to Buy with $1,000, Citi Buy with $1,100, UBS Hold with $960, TD Cowen Hold with $800 cut from $995 | StockAnalysis forecast latest forecasts | July 22, 2026 |
| Short interest | 8.78 million shares short, 11.29% of shares outstanding, 1.76 days to cover | StockAnalysis statistics short selling | August 2, 2026 |
| Technical snapshot | 20-day average $745.09, 50-day average $826.15, 100-day average $828.32, 200-day average $601.15, RSI 45.54, ADX 11.90, beta 1.48 | Barchart and StockAnalysis technical snapshots | July 31, 2026 |
| Supply demand commentary | EML and pump laser supply remains meaningfully below demand, with an estimated supply-demand imbalance above 30%, and EML units on track to grow more than 50% from December 2025 to December 2026 | Lumentum Q3 fiscal 2026 earnings call | May 5, 2026 |
| Strategic developments | NVIDIA direct investment via Series A Convertible Preferred, a multi-year multi-billion dollar OCS purchase agreement, a fifth indium phosphide fab in Greensboro North Carolina, and a fiscal Q4 revenue target above $1 billion | Lumentum Q3 fiscal 2026 earnings call and Mizuho Technology Conference transcript | June 9, 2026 |
| Next earnings date | August 11, 2026 for fiscal Q4 2026 results | StockAnalysis statistics important dates | August 2, 2026 |
This LITE AI stock analysis page is an informational research tool, not investment advice, a recommendation, or a guarantee of future returns. Forecast ranges are scenarios based on available public data, valuation assumptions, and technical snapshots as of the August 2, 2026 data cutoff, and they may be wrong, incomplete, or outdated after new earnings, order news, capacity updates, dilution events, or market moves.
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