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On Wednesday, Rosenblatt Securities highlighted Lumentum Holdings (NASDAQ:LITE) in a positive light following the Optical Fiber Conference 2025. The firm’s analysts were impressed with Lumentum’s presentation, where the company outlined an ambitious growth plan. Lumentum aims to increase its quarterly revenues from $400 million to over $750 million and anticipates higher profit margins in the upcoming years. Want deeper insights into optical technology companies? InvestingPro offers comprehensive analysis of over 1,400 US stocks, including detailed Pro Research Reports that transform complex data into actionable intelligence.
The company announced that it would start shipping Optical Circuit Switches (OCS) to Artificial Intelligence Data Centers in the second half of 2025. Lumentum is optimistic about the OCS market, projecting it to reach $1.5 billion by 2029, with the company expecting to secure 30% to 50% of this market share. This development places Lumentum in direct competition with Coherent (NYSE:COHR), which currently has a market capitalization of $9.87 billion and generates annual revenue of $5.31 billion. According to InvestingPro data, Coherent appears undervalued based on its Fair Value analysis, with 16 analysts recently revising their earnings estimates upward for the upcoming period.
Additionally, Lumentum’s market prospects are further buoyed by the burgeoning optics sector for satellite technology, as evidenced by the new partnership between Fabrinet (NYSE:FN) and Amazon (NASDAQ:AMZN). This collaboration is believed to focus on optics for satellite technology rather than Datacom transceivers, thereby enlarging the overall optical market.
Ciena (NYSE:CIEN) also contributed to the optimistic industry outlook by providing more details on its strategy to penetrate the Data Center space in the coming years through Coherent-lite and IMDD technology. These movements in the industry are creating opportunities for companies like Lumentum and Coherent, particularly in the production of new, relatively high average selling price (ASP) and high gross margin (GM) products, such as ultra-high power (UHP) lasers.
Lumentum’s strategic direction and the potential for market expansion in the optical technology sector have positioned the company favorably in the eyes of Rosenblatt Securities analysts. As the company gears up to capitalize on these emerging opportunities, investors and industry watchers will be closely monitoring its progress in the rapidly evolving tech landscape.
In other recent news, Coherent Corp. has announced several developments that could impact its operations and strategic direction. The company plans to showcase its advanced 1.6T-SR8 optical transceiver at the Optical Fiber Communication Conference and Exhibition (OFC) 2025, highlighting its use of 200G vertical cavity surface emitting lasers. Coherent has also unveiled a high-efficiency optical transport solution that employs a multi-rail transmission method, aiming to enhance line system capacity while reducing power requirements. This innovative technology is projected to be generally available in the first half of 2026. Additionally, Coherent has introduced a 400 Gb/s Differential Electro-absorption Modulated Laser (D-EML) designed to support high-speed optical networking in data centers.
In a strategic move, Coherent announced the planned sale of its epitaxial fabrication facility in Champaign, Illinois, as part of efforts to streamline manufacturing operations. The company has not yet disclosed potential buyers or the terms of the sale. Furthermore, Coherent launched a new embedded Optical Time Domain Reflectometer (eOTDR) for fiber network diagnostics, emphasizing its capabilities for real-time monitoring and predictive maintenance. These developments underscore Coherent’s ongoing commitment to innovation in photonics and its efforts to refine its operational structure.
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