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SAN JOSE - Lumentum Holdings Inc. (NASDAQ:LITE), whose stock has surged an impressive 173% over the past year according to InvestingPro data, will fund a major capacity expansion of its U.S.-based semiconductor facility, according to a press release issued by the company on Thursday.
The expansion of the Rose Orchard Way facility in San Jose, California, is expected to create additional high-skilled engineering and manufacturing jobs. The company, currently valued at $7.7 billion and trading near its 52-week high, manufactures ultra-high-power (UHP) lasers at this location, which are components used in Co-Packaged Optics platforms for AI data centers. For deeper insights into Lumentum’s financial health and growth potential, InvestingPro subscribers have access to over 10 additional exclusive ProTips and comprehensive analysis.
"This investment is a testament to our leadership in laser and photonic technologies," said Michael Hurlston, president and CEO of Lumentum. "Our commitment to expanding domestic manufacturing not only supports a robust AI infrastructure supply chain but also reinforces America’s role in global technology leadership."
The UHP laser is an indium phosphide product designed for low-power, resilient optical networking systems used in modern AI data centers. Lumentum cited its decades of experience in high-power telecom lasers as the foundation for this technology.
The company also noted its collaboration with NVIDIA on advanced networking technologies for AI infrastructure. Gilad Shainer, senior vice president of Networking at NVIDIA, stated, "With AI transforming every industry, the demand for high-performance, energy-efficient optical interconnects is growing rapidly."
Lumentum, headquartered in San Jose, designs and manufactures optical and photonic products for telecom, enterprise, and data center networks. The company did not disclose the financial details or timeline for the expansion project in its statement.
In other recent news, Lumentum has updated its financial outlook, leading to several analyst revisions. The company has increased its revenue guidance for the fourth quarter of fiscal year 2025, now expecting revenues between $465 million and $475 million, up from the previous range of $440 million to $470 million. This update has prompted Stifel to raise its price target for Lumentum stock to $100, maintaining a Buy rating, while Needham increased its target to $105, also with a Buy rating. JPMorgan has similarly adjusted its target to $100, citing stronger demand in telecom data center interconnects and datacom products.
Lumentum’s management has indicated a positive outlook, with expectations to achieve a $500 million revenue target in the first quarter of fiscal 2026, which is ahead of previous projections. The company also anticipates reaching $600 million in quarterly revenue by the fourth fiscal quarter of 2026, according to JPMorgan. UBS, however, has maintained a Neutral rating with a price target of $78, reflecting a more cautious stance despite the improved revenue forecasts. These developments highlight a broad-based strength across Lumentum’s core businesses, as shared by the management at a recent investor conference.
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