Lumentum: Holding Large Upside On The 3.2T Physics Wall
Lumentum Holdings Inc. is being rated as a strong buy due to its promising growth prospects. The company's shift to a foundry model, supported by a significant capacity deal with Nvidia, positions it well for future expansion. Analysts believe that Lumentum's technology and market strategy will enhance its profitability in the coming years.
- ▪Lumentum is rated a strong buy as Wall Street underestimates the longevity and margin potential of its InP EMLs at the 3.2T node.
- ▪The company's shift to a foundry model is underpinned by Nvidia's $2B capacity lock-up.
- ▪This shift enables prepayments, inelastic pricing, and client-funded CapEx, supporting multiple expansions.
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