Lumentum Holdings may have doubled its value in 2026, but it is still attractive following a recent pullback, making it a good buy, according to Barclays. The bank upgraded the optical and photonic technologies maker to overweight from equal weight. It maintained its $1,000 price target on shares, implying 36% upside from Friday’s close. Shares are up nearly 100% year to date, sharply outperforming the S & P 500’s 8.9% advance in that time. However, the stock has fallen 18% over the past three months as investors have cast doubt on whether demand for the company’s range of optics-based technologies for the artificial intelligence industry will remain durable. The iShares Semiconductor ETF (SOXX) . The SOXX is up 25% over the same period. LITE 3M mountain Shares are down 18% over the past three months. Lumentum should bounce back as investors digest updates on its business and the broader semiconductor industry that will be released during this earnings season, according to analyst Tom O’Malley. “LITE underperformed the [SOXX ETF] by ~40% in the last 3 months and has seen multiple compression on the thesis that scale-up [co-packaged optics] is somehow pushed out,” O’Malley said Monday in a note to clients. “Nothing has changed…The underlying fundamentals remain strong for transceiver/laser demand, and we like the risk/reward on the pullback.” “We think commentary on wafer allocation, the ability to procure memory, and positive revisions of long-term [total addressable markets] will move stocks more than beats and raises,” He added. “The ‘now’ matters a lot less than the ‘later,’ which is the theme heading into this earnings period where strong numbers are expected across the board with positive stock movements tough to come by.” Lumentum is scheduled to report its fiscal fourth quarter earnings on Aug. 11. Barclays’ call falls in line with consensus on Wall Street. Of the 27 analysts covering Lumentum, 22 have a buy or strong buy rating on the stock, LSEG data shows.
This stock offers a cheap way to play semiconductors, Barclays says
