Lumentum Says AI Optical Demand Outstrips Supply Into 2029

Lumentum's CEO said its optoelectronic components are effectively committed through early 2029, with the company unable to meet large portions of demand. The stock rose in early trading and lifted peers in the optical group as Lumentum expands manufacturing capacity. The company reported strong revenue growth and expects further gains, though new laser capacity takes about three years to reach customers.

Lumentum's chief executive said capacity for its optoelectronic parts is largely committed until early 2029. Some products face a shortfall covering roughly 70% of demand next year, while others face about 30% through 2028. The company has added a North Carolina fab and is enlarging one in Japan, but new laser output takes about three years to reach buyers.

Recent results showed revenue more than doubling to $1.01 billion, an eighth consecutive quarterly increase. Non-GAAP gross margin exceeded 50%, EPS was $3.23, and management guided next-quarter revenue to about $1.25 billion, over 130% higher year over year, with operating margin near 40%. NVIDIA's $2 billion investment and a Stifel target of $1,232 also featured.