LITE: The Longer-term Setup is More Interesting!
$Lumentum(LITE)$ Lumentum Holdings sits at the core of optical and laser infrastructure. Its strength is not hype, it is plumbing. LITE builds the components that power data centers, fiber networks, and advanced sensing.
The near-term story is uneven demand. Datacom spending slowed, customers worked through inventory, and the stock paid the price. That phase is maturing.
The longer-term setup is more interesting. AI workloads keep pushing data center bandwidth higher. That means more optical links, not fewer. At the same time, telecom capex is cyclical. It pauses, then it comes back. Lumentum has lived through this cycle many times.
Gross margins are sensitive to volume, so recoveries matter. When demand turns, operating leverage shows up fast.
This is not a momentum trade. It is a patience trade. LITE works best when expectations are low and time is your ally. I keep it on my watchlist as a quality photonics name positioned for the next infrastructure upcycle, not tomorrow, but ahead.
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