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On Wednesday, Raymond (NSE:RYMD) James analysts increased the price target for Lumentum stock (NASDAQ: LITE) to $90 from $80, while maintaining a Strong Buy rating. The decision follows a positive preannouncement and recent discussions with the company’s management in Silicon Valley. Currently trading at $77.65, the stock sits within a broader analyst target range of $70-$110, with 15 analysts recently revising their earnings estimates upward according to InvestingPro data.
Lumentum recently exceeded its quarterly expectations and adjusted its estimates for September and December 2025. However, the sales target for June and September 2026 remains at $600 million. While the company isn’t currently profitable, InvestingPro analysis indicates analysts expect profitability this year. The company’s growth is driven by rising demand in artificial intelligence applications across its product portfolio, including EML/CW lasers, datacom transceivers, and ZR/DCI. Want deeper insights? InvestingPro offers exclusive access to detailed financial analysis and 10 additional ProTips for Lumentum.
The analysts noted that hyperscalers are shifting away from Chinese manufacturers, which presents growth opportunities for Lumentum, although capacity constraints remain a challenge. They highlighted the company’s strong position in the market, particularly with its Optical Circuit Switches (OCS) and Co-Packaged Optics (CPO), which are expected to provide additional growth momentum.
Raymond James analysts see potential upside beyond the preannouncement figures, reflecting their optimistic forecast for Lumentum’s performance. They anticipate that the company’s best-in-class technology will continue to drive its market leadership.
In other recent news, Lumentum Holdings Inc (NASDAQ:LITE). reported strong fiscal third-quarter results, surpassing Wall Street expectations with earnings per share (EPS) of $0.57 and revenue of $425.2 million. The company’s performance was bolstered by strong demand in the Cloud and Networking segment, which grew 8% sequentially and 16% year-over-year. Looking ahead, Lumentum provided optimistic guidance for the next quarter, projecting revenue between $440 million and $470 million and EPS between $0.70 and $0.80. Analysts at Stifel maintained a Buy rating with an $85 price target, citing the company’s robust third-quarter performance and positive outlook.
Additionally, Morgan Stanley (NYSE:MS) raised Lumentum’s stock price target to $76, maintaining an Equalweight rating, following the company’s positive revision of its fiscal fourth-quarter expectations. Needham analysts adjusted their outlook, reducing the price target to $100 from $110, while maintaining a Buy rating, reflecting broader compression in the technology sector. Lumentum’s management anticipates continued momentum in the fourth quarter, driven by a surge in 800G Datacom modules, especially for Google (NASDAQ:GOOGL).
The company is also focused on expanding its Electro-absorption Modulated Lasers (EML) production capacity in Thailand, which is expected to contribute to strong growth in fiscal year 2026. Despite facing challenges such as tariffs, Lumentum remains confident in its ability to achieve a $500 million quarterly revenue run-rate by the end of calendar year 2025. These recent developments highlight Lumentum’s strategic focus on growth and operational efficiency.
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