Deutsche Bank initiated coverage of Lumentum Holdings (LITE) with a Buy rating. The bank set a price target of $1,200 for the stock. It identified the company as a high-conviction pick-and-shovel play for artificial intelligence infrastructure.
Analyst Gianmarco Conti noted that the next phase of AI deployment focuses on connectivity. Conti described Lumentum’s lasers as indispensable components for all AI data center architectures. These components support both pluggable and co-packaged optics.
The firm stated that silicon cannot replace Lumentum's photonic technology. Lumentum currently leverages supply constraints to raise prices for its essential optical products.