Lumentum Is Down 40% in a Month. What Will It Take to Get LITE Stock Back to $1,000?
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One of the AI trade’s top optical names has handed back a large share of its gains in a matter of weeks, even as its business keeps accelerating. Lumentum (NASDAQ:LITE | LITE Price Prediction) stock has fallen 40% over the past month and recently traded at $592.82. A month ago, on October 13, Lumentum stock traded at $987.99.
Getting Lumentum back to $1,000 would take a 68.7% gain from the current price. The stock has cleared that mark before, setting a 52-week high of $1,143.
Selling across AI hardware and chip stocks is adding to the pressure, and Lumentum stock is down 5% on the day. Across the market, tech stocks struggled as NVIDIA (NASDAQ:NVDA) kept sliding, and technology trails every other major sector.
Lumentum’s Strong Quarter Ran Into Profit Taking
On November 2[1], Lumentum reported fiscal Q1 2027 results that beat expectations on both lines. The company posted adjusted earnings per share (EPS) of $4.57[1] against a $4.22 consensus, while its revenue of $1.26 billion grew 136.5% year over year (YoY). CEO Michael Hurlston stated, “Lumentum built on its strong momentum in the first fiscal quarter of 2027, delivering growth across all our businesses, with pump lasers and optical circuit switches (OCS) being the leading contributors.”[1]
The quarter also delivered a second major near-packaged and co-packaged optics (NPO/CPO) design win for Lumentum, backed by purchase commitments of more than $5 billion[1]. Co-packaged optics place the optical engine right beside an AI chip, so data moves as light instead of over copper wiring. Lumentum guided its fiscal Q2 2027 revenue to a range of $1.575 billion[1] to $1.625 billion.
Coverage of Lumentum remains bullish, with 5 Strong Buy, 18 Buy and 5 Hold ratings and no Sell ratings. The average analyst price target is $1,069.19. That gap between strong results and a falling share price could point to profit taking in AI optics stocks.
How Coherent and Applied Optoelectronics Stack Up Against Lumentum
Coherent (NYSE:COHR) stock is at $214.24, down 8%, a steeper drop than Lumentum’s. Results released November 4[2] showed Coherent’s fiscal Q1 2027 revenue at $2.37 billion, up 49.9% YoY, with its Datacenter & Communications division making up 82% of sales.
Applied Optoelectronics (NASDAQ:AAOI) stock is down 50% over the past month to $49.08, a deeper slide than Lumentum’s. Against the prior close, the stock is down 7%.
Quarterly revenue at Applied Optoelectronics rose 127.5% YoY to $269.88 million in Q3 2026, reported November 5. The company’s generally accepted accounting principles (GAAP) net income of $6.3 million leaned on $8.2 million of other income and $3.1 million of interest income, hiding a GAAP operating loss of $1.44 million.
Where Lumentum’s Business Model Splits From Its Peers
Lumentum leans on lasers and optical subsystems, with pump lasers, cloud transceiver modules and optical circuit switches leading its growth. Near-packaged and co-packaged optics wins tie Lumentum to the next wave of AI chips, and the company is scaling up a factory in Greensboro, North Carolina.
Coherent sells across the full optical signal chain, from materials through lasers and transceivers, and positions itself as an independent supplier to hyperscalers and chipmakers. Applied Optoelectronics pairs hyperscale transceivers with a cable TV broadband business and is in the middle of a large capacity expansion.
Considering Lumentum’s Path Back to $1,000
Optimists can point to Lumentum’s sold-out optoelectronic capacity[1], rising demand for optical circuit switches and the commitments behind its newest design win. A recovery toward that level would likely need AI data center optics demand to hold up and sentiment toward AI hardware to stabilize.
On the other side, the bears have their own list. Risk factors in Lumentum’s release include tariffs, export controls, supplier execution, debt servicing and swings in product mix, and sentiment can also turn fast across AI hardware, as the month’s slide in Applied Optoelectronics shows.
Lumentum’s Next Quarter Will Test the Road to $1,000
A key question for Lumentum is whether its fiscal Q2 revenue lands inside the guided range. Lumentum’s other hurdle is the mood around AI hardware, so watch for signs that the selloff across optics names is easing.
A strong quarter with steady demand could rebuild confidence, while a softer outlook may extend the pullback. Volatility across optics names could remain elevated until the AI hardware selloff ends. Optical suppliers like Lumentum play a picks-and-shovels role. We rounded up seven names powering that same wave outside the chipmakers in a free report you can grab here.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk. His work has appeared in 24/7 Wall St., The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, MarketScreener, TalkMarkets, Finmasters, and others. With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
