Lumentum (LITE +9.41%), a name previously known mostly to those who audit fiber optic cables, experienced a rather vigorous upward trajectory this week. A 40% jump, you say? One almost expects a fanfare, or at least a discreet tip to the right authorities. The reason, as always, involves money – and a new, glittering obsession called ‘artificial intelligence.’
The Cloud’s Appetite
Their latest quarterly report revealed revenue of $665.5 million – a 65.5% increase year over year. A substantial figure, certainly. But let us not be overly impressed by mere numbers. It’s not the size of the ship, my friends, but the cargo it carries. And in this case, the cargo is light – photons, to be precise – and in high demand. It seems these ‘AI’ contraptions require an awful lot of data transfer, and Lumentum provides the pipes. A most convenient position, wouldn’t you agree?
The CEO, a Mr. Hurlston, declared they are “a foundational engine of the AI revolution.” A bold claim. One might ask: is it revolution, or merely a very lucrative rearrangement of existing technologies? Regardless, the man knows how to speak to investors. He states that “virtually every AI network is powered by Lumentum technology.” A touch hyperbolic, perhaps, but effective. One must admire the audacity.
Profitability, it appears, is also improving. Their operating margin expanded by 17 percentage points to 25.2%. A tidy sum. Adjusted net income skyrocketed by 380% to $143.9 million, or $1.67 per share. Wall Street expected $1.41. A pleasant surprise, naturally. One wonders if the analysts were simply asleep at the wheel.
The Data Center Gold Rush
Looking ahead, Lumentum anticipates revenue growth of roughly 85% in the next quarter, projecting between $780 million and $830 million. They also foresee adjusted operating margins of 30% to 31% and earnings per share of $2.15 to $2.35. A most optimistic forecast. It appears the data center buildout is still in full swing. A veritable gold rush for those who provide the shovels – or, in this case, the optical components.
Mr. Hurlston reiterated that their roadmaps are “mission-critical to the world’s AI leaders.” A rather grandiose statement, but one can hardly blame the man for enjoying the view from the top. The entire affair is rather reminiscent of a well-executed scheme. Not illegal, mind you, simply… exceptionally profitable. And in the current climate, what could be more admirable than that?
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2026-02-08 23:52