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$Lumentum(LITE)$ is the ultimate winner of AI's Light vs Storage battle. While memory storage is critical, optical modules represent the true bottleneck of AI data centers because moving data at the speed of light is mandatory to prevent massive GPU idling.
The optical sector has given investors much worry lately as they have experienced a sharp pre earnings cooling with Lumentum dropping 7% in a single day.
Lumentum is expected to report a huge 105% year over year revenue explosion to around USD 988 million.
The recent stock pullback isn't a sign that AI demand is slowing down. If Lumentum beats expectations & raises its 2027 capacity execution guidance, it will trigger a short squeeze across the entire optics sector.
NVIDIA is also invested in Lumentum with a USD 2 billion equity stake. When you buy Lumentum you know that it has the backing of Lao Huang's checkbook.
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