Lumentum (LITE) says its optical circuit switch (OCS) backlog is 'well beyond $400 million,' with AI demand running ahead of its supply. The stock fell 9.78% Monday in a broad selloff of optical stocks, to $995.41, after gaining 565.34% over the past year. Fiscal Q4 revenue rose 109.3% to $1.006 billion, and non-GAAP EPS of $3.23 beat the $2.97 consensus with a 50.4% non-GAAP gross margin. The company posted a Q4 GAAP net loss of $7.16 billion, and management says it is 'way behind our shipments' on high-power lasers. The consensus target of $1,161.96 implies about 16.7% upside from the current price.
Summary written by Upside AI from the original article. Read the source for full details.
Original headline: Lumentum’s Massive Backlog and Demand Justify Buying at Today’s Price
Read the original on Yahoo Finance ↗
Related news
- CoreWeave debt concerns : AI demand is strong , but can the data centre major cash flow justify its spending ? Explained
Investor concern over debt financing for AI infrastructure is spreading into tech stocks. CoreWeave shares fell 15.5% on Wednesday, then recovered to close 5.94% higher on Thursday, while Nebius and Iren also came under pressure. Investors are questioning whether CoreWeave can generate enough operating cash flow to fund heavy chip and data centre spending, given its heavily negative free cash flow. CEO Mike Intrator said the backlog more than supports all debt obligations, and Deutsche Bank said it exceeds $100 billion, with about two-thirds from investment-grade customers, reiterating its buy rating. Oracle's five-year CDS spread reached 282 basis points, a roughly 10% rise in one week, and a CDS spread around 1,000 basis points is generally seen as a sign of credit distress.
- Microsoft can justify higher valuation as AI demand drives Azure growth, UBS says
UBS raised its price target on Microsoft to $675 from $525 and kept its 'buy' rating, arguing strong AI demand supports higher growth expectations. The bank sees the valuation as reasonable at 23 times estimated 2027 adjusted earnings despite a 39% rally since the June-quarter results. The market expects Azure revenue growth of 47% for the September quarter, a potential two-percentage-point beat that UBS believes is achievable given enterprise demand, rising AI infrastructure spending, higher OpenAI revenues and rising hosted GPU prices. UBS also sees upside from Microsoft 365 as usage-based pricing for Copilot expands, and has lifted its valuation multiple to 25 times estimated 2028 adjusted earnings from 19 times. With expectations high, the bank notes less room for disappointment at the 28 October results.
- Apple (AAPL) Faces iPhone Demand Pressure. Can Its Growth Justify the Premium?
According to Nikkei Asia, as reported by Reuters on October 9, Apple told some suppliers to reduce production of components for the iPhone 18 Pro and iPhone 18 Pro Max, cutting October orders by at least 15%. Weaker demand from late August through October may partly reflect a change in Apple's launch schedule, while rising memory-chip costs driven by AI data centers led it to raise iPad and MacBook prices in June. Supporting the case are more than 2.5 billion active devices and a record $30.7 billion in services revenue for the fiscal third quarter ended June 27, 2026, up 12% year on year. However, the iPhone 18 Pro ($1,199) and Pro Max ($1,299) are each $100 more than their predecessors, which could lead buyers to delay upgrades or choose cheaper options.
Related markets
Latest news
- Meta Earnings: What To Look For From META
Meta Platforms (NASDAQ:META) will report earnings this Wednesday after the market closes. Last quarter, revenue reached $60.8 billion, up 28% year on year and above analysts' expectations, though revenue guidance for next quarter slightly missed forecasts; daily active users hit 3.6 billion, up 3.4%. The market expects revenue growth of 23.6% this quarter, slowing from 26.2% a year earlier, and analysts have generally reconfirmed their estimates over the past 30 days. Over the last month, consumer internet stocks have gained 1.3% on average, while Meta is down 4.8%.
- An AI bust could come from places investors arent watching , an economist says
Concerns about an AI bubble are growing, and TS Lombard's Dario Perkins warns that investors may be overlooking other risks. Debt among smaller cloud providers, model developers and suppliers could reach $2 trillion by the end of 2027. Perkins does not see this as a systemic risk, but warns that earnings disappointments and canceled orders could ripple through the ecosystem, and that a chip glut could follow over-ordering. Much of the industry's revenue growth still comes from spending within the AI ecosystem rather than from businesses and consumers outside it. He also flags political backlash, noting that ordinary people dislike AI and nearby datacenters, and warns that one high-profile accident could turn AI toxic.
- Yen jumps after JGB auction draws big demand , euro finds relief
The yen rose 0.2% to 158.15 per dollar in Asian trading after a 20-year Japanese government bond auction drew bids of 5.84 times the amount sold, well above the 4.01 times at the previous auction, and the yield fell 6 basis points to 3.71%. A State Street strategist said the record demand suggests sidelined cash is returning and that JGBs are becoming a relative haven from political and fiscal volatility in Europe, particularly France. Anti-government protests in France prompted curfews in several cities, while Italy said it would send 500 troops after two days of unrest, and the euro rallied 0.2% to $1.1234. Elsewhere, bitcoin slipped 0.3% to $81,674.25 and ether edged down 0.2% to $2,393.21.
- Unemployment rate dips to 4 . 7 % - but vacancies hit five - year low
Vacancies fell by 21,000 to 691,000 in the three months to September, the biggest drop since the three months to March and the lowest since July to September 2014 outside the pandemic, while unemployment dipped in the three months to August. Payroll numbers were down 66,000 over the year to September. The ONS said the fall was mainly among smaller firms struggling with higher labour costs, following rises in employer national insurance, the minimum wage and workers' rights. A CBI survey found labour costs and regulations were making it harder to create jobs, and firms urged the Chancellor not to add to their burden in the October 28 Budget. ICAEW's Suren Thiru said the labour market is 'running on idle' and unemployment could climb above 5 per cent, while Shadow Chancellor Andrew Griffith blamed Labour's 'Jobs Tax' and red tape.
- CNBC Daily Open: Tech rebounds in the U.S., but Asia isn’t buying it yet
U.S. tech stocks rebounded as the Nasdaq Composite rose more than 1% on Monday, with Nvidia up 1.4% and Tesla up 3.8%. In Asia, however, tech shares fell on Tuesday, with South Korea's Kospi down over 4% and Japan's Nikkei 225 down 1.6%. Nvidia also unveiled plans to back four German AI startups as part of its nearly $10 billion European investment commitment. Jenny Lee of Granite Asia said Asian companies are reaching IPOs much sooner, often at four to five years old, while Jio Platforms' Indian IPO saw its anchor investor quota oversubscribed more than 30 times, aiming to raise up to 302 billion rupees ($3.2 billion). In Singapore, several agricultural stocks fell after Senior Minister K Shanmugam warned that companies would not escape responsibility for possible roles in the haze, noting seven firms had been questioned by the Singapore Exchange.
- NiSource (NI) Stock Looks Overvalued Against Its Dividend Outlook
NiSource has nearly doubled shareholders' money over the past five years, delivering a 97.6% total return, which raises the question of whether dividends can justify the current share price. The article highlights a new 20-year energy agreement with Microsoft, including customer-funded grid upgrades and long-term electric service for data centers, which may affect future capital needs and cash-flow visibility. Using a Dividend Discount Model with inputs of about $1.35 dividend per share, roughly 9.07% return on equity, a payout ratio slightly above 61%, and implied dividend growth of about 3.5%, the estimated intrinsic value sits meaningfully below the current share price of $41.95. The model still does not bridge that gap, suggesting income investors are paying a premium for a relatively steady payout with modest assumed growth.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.