Skip to navigationSkip to main contentSkip to right columnHabib Ur RehmanSat, July 11, 2026 at 10:10 PM GMT+2 2 min readLumentum Holdings Inc. (NASDAQ:LITE) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 143.31%. On June 11, JPMorgan analyst Samik Chatterjee reiterated an Overweight rating and maintained a $1,130 price target, arguing that the recent pullback in optical-networking stocks had created a buying opportunity.Chatterjee said Lumentum shares had fallen about 15% from their early-June high as investors worried about limited summer catalysts and possible delays in co-packaged optics adoption. He pushed back on those concerns, citing supply-chain checks indicating that Nvidia's large-scale CPO rollout remained on track and may be ahead of schedule. JPMorgan also pointed to growing interest from cloud-service providers and other customers, which could broaden demand beyond Nvidia.Why Lumentum (LITE) Could Benefit From AI Optical Networking Demand as Co-Packaged Optics Adoption AcceleratesCo-packaged optics places optical engines close to switch chips to increase bandwidth while reducing power consumption in large AI systems. JPMorgan viewed Lumentum's valuation of roughly 25 times estimated 2028 earnings as reasonable, given projected annual earnings growth above 40%. The thesis still depends on deployment schedules, customer concentration and Lumentum's ability to convert product demand into sustained shipments and earnings growth.Lumentum Holdings Inc. (NASDAQ:LITE) develops optical and photonic technologies for AI and cloud networking, telecommunications, industrial manufacturing and sensing, including lasers, components, modules and optical subsystems.While we acknowledge the potential of LITE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.Disclosure: None. Follow Insider Monkey on Google News.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info