The following recap comes from a segment of The AI Investor Podcast, hosted by 247 Wall St. Analysts Eric Bleeker and Austin Smith. In the episode titled A New Portfolio Add In Our Most Important Episode Of The Year, the hosts broke down Lumentum (NASDAQ:LITE | LITE Price Prediction) after its blockbuster fiscal Q4 earnings report and touched on the resurgence of Marvell Technology (NASDAQ:MRVL) as a Microsoft (NASDAQ:MSFT) custom silicon partner. Below, we recap the Lumentum thesis first, then the shorter Marvell segment.
Watch The Episode
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The Big Picture
- This segment is from The AI Investor Podcast, hosted by Eric Bleeker and Austin Smith.
- Lumentum was originally recommended around $83.85 and is now trading around $926 per share, with shares up 14% on the day following its conference call.
- Eric Bleeker highlighted that co-packaged optics demand from Lumentum’s largest customer, NVIDIA (NASDAQ:NVDA), is coming in the second half of 2027, and that near-package optics is “completely additive,” expanding total addressable market.
- On Marvell, Microsoft’s Maya 300 custom accelerator is targeting 300,000 chips in 2027 with Marvell as a key design partner.
Lumentum Earnings: A 5% Drop That Flipped To A 14% Surge
Eric Bleeker walked through Lumentum’s fiscal Q4 2026 earnings report, which he described as an unusually sharp intraday reversal. The stock initially dropped 5% on results before surging 14% the day following the conference call. Bleeker’s take was straightforward: the market keyed off headline supply chain chatter first, then rerated the stock as management addressed those concerns head-on.
The report itself was strong on the numbers. Revenue came in at $1,006.3 million, up 109.3% year over year, with non-GAAP EPS of $3.23 versus the $2.97 consensus. Non-GAAP gross margin hit 50.4%, up 1,260 basis points year over year, and management guided Q1 FY27 revenue to a midpoint of $1.25 billion, arriving at their target model more than a quarter ahead of schedule.
Why The Conference Call Flipped Sentiment
Per Bleeker, the call rebutted widespread supply chain chatter about delays in co-packaged optics and 800G technology. Lumentum said visibility had actually sharpened. Management framed the company as sitting at the center of a genuine architectural shift in AI data centers, with CEO Michael Hurlston stating that “Lumentum is positioned at the heart of a secular industry shift. As AI compute workloads increase in both speed and bandwidth, data center architects are turning to optical links as a primary means of connectivity.”
Bleeker read out one quote from the call that captures the scale of what is being built. Per management: “For one major hyperscaler, the network capacity connecting just two AI data center sites could double the total global backbone capacity they built over the entirety of the last decade.” That single line reframes the pump laser and high-power laser demand story. Lumentum disclosed that pump lasers are effectively sold out for the foreseeable future despite rapid capacity expansion, with a four-fold increase in pump laser shipments expected over the next several quarters and market share in the 70-80% range.
Co-Packaged Optics And The NVIDIA Timeline
The other narrative shift Bleeker flagged was on co-packaged optics, or CPO. Lumentum said co-packaged optics demand from their largest customer, NVIDIA, is landing in the second half of 2027. Management noted that ultra-high power laser chips are expected to ramp in the second half of calendar 2027, ahead of customer scale-up deployments in calendar 2028.
Then there is the near-packaged optics angle. Bleeker emphasized that near-package optics is “completely additive,” expanding Lumentum’s total addressable market rather than substituting for CPO. Management on the call confirmed the framing, stating that “The NPO opportunity is completely additive for us, significantly increasing the optical TAM.” Even Lumentum’s largest CPO customer is evaluating NPO for specific new use cases, and multiple high-velocity engagements are already underway using the company’s differentiated laser chips.
The Recommendation Math: From $83.85 To $926
The reason this episode carries the framing it does: Lumentum was originally recommended by 24/7 Wall St.’s AI Investor Podcast around $83.85. Shares are now trading around $926 per share, with the stock up 708.01% over the past one year and up 151.27% year to date through August 14, 2026. Stock picks in the portfolio are given away (for free!) in new episodes of the AI Investor Podcast. You can subscribe to receive new episodes on YouTube, Apple Podcasts, Spotify, and all major podcast providers.
Bleeker’s forward case rests on the layering of Lumentum’s growth engines. Optical circuit switch backlog exceeded $400 million as of the prior quarter, and management said Q1 FY27 will mark the first triple-digit OCS revenue quarter. A multi-hundred-million-dollar CPO order, deliverable in first half calendar 2027, is already booked. And 1.6T transceivers are ramping into production as tier-one hyperscalers transition their custom AI clusters off 800G.
Marvell: The Microsoft ASIC Story
The shorter secondary discussion focused on Marvell’s resurgence as a custom silicon partner. Per the hosts, Microsoft’s Maya 300 custom accelerator is reportedly targeting 300,000 chips in 2027 with Marvell as a key design partner. That fits Marvell’s broader trajectory: management has told investors custom revenue is on track to more than double year over year in FY2028, tracking toward a long-term target of over $10 billion in custom revenue in fiscal 2029.
The most recent quarter reinforced that setup. Marvell reported Q1 FY27 revenue of $2.418 billion, up 27.6% year over year, with data center revenue of $1.833 billion representing 76% of total revenue. CEO Matt Murphy told investors: “We are seeing exceptional AI-related bookings, and as a result, we are significantly raising Marvell’s revenue outlook for both fiscal 2027 and fiscal 2028 compared with the guidance we provided last quarter.”
The stock has responded. Marvell shares are up 181.5% over the past year and up 161.64% year to date through August 14, 2026. Marvell’s next earnings report is scheduled for August 27, 2026, with prediction market odds implying a 69% probability of a beat against a $0.93 non-GAAP EPS consensus.
What Investors Should Watch Next
For Lumentum, the setup Bleeker outlined implies three catalysts to monitor. First, whether pump laser capacity expansion tracks the four-fold shipment increase management guided to. Second, OCS execution as the company scales into its first triple-digit revenue quarter for the product line. Third, the initial ELS module shipments and NPO ramps that would confirm the additive TAM thesis.
For Marvell, the near-term catalyst is the company’s August earnings report and any update on the Maya 300 volume ramp, followed by the trajectory of the scale-up optics business the Celestial AI acquisition unlocked. Both stocks sit on the same secular thesis: AI compute is bottlenecked by interconnect, and the companies solving that bottleneck are pricing it in.
For readers looking to go deeper on the Lumentum story, our prior coverage tracks the earnings arc across the fiscal year: Lumentum’s Q2 preview after the 416% rally, the Q3 setup after the 1,444% surge, and the Q4 live coverage after the 600% one-year rally.
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